Highcross Shopping Centre, previously described as the flagship destination in the Hammerson property empire, has entered receivership.
Global property specialists Savills stepped in as receivers at the Leicester shopping mall on February 9 according to letters posted last week to shops and business operating there.
Tenants have been told Savills is involved solely with the ownership of the site, rather than its day-to-day running, which is being left in the hands of the landlord company.
Shops and cafes within the 1 million sq ft shopping centre were busy over the weekend, with no outward signs that anything had changed. More than 100 businesses are based there.
A letter from Savills to tenants said: “The appointment of receivers does not impact on your day-to-day trading from the property you occupy.
“All income receivable from the centre and all monies payable by occupiers, whether by way of rent or otherwise, is now due to the receivers.”
It added that a “consensual handover period” was underway.
It comes following multi-million pounds losses at Highcross, which is jointly owned by retail property giant Hammerson and Asian investors.
Accounts for Highcross Shopping Centre Ltd showed a loss after tax of almost £63 million in 2021 on the back of losses of £146.5 million the year before, partly due to the huge impact of the pandemic on high street retail.
It is understood that rising interest rates and rising costs caused by high inflation made the centre’s debts unsustainable.
Big brands trading in the shopping centre include Zara, Next, Goldsmiths, H&M, North Face, Superdry, Zizzi, Wagamama and Treetop Adventure Golf.
In recent years Highcross, like similar shopping centres, has seen some big name shops and food & drink outlets close their doors including Debenhams, Top Shop, House of Fraser, Carluccio’s and Café Rouge.
Hammerson said last summer that covenants relating to a loan on Highcross had been breached and at the time the owners were working with lenders to find the best outcome.
The situation contrasts sharply with the 2018 deal which saw Hammerson sell a half stake in Highcross for £236 million to an Asian-based investor.
Today a Hammerson spokesman told BusinessLive they would not be making a comment.
Leicester City Mayor Sir Peter Soulsby told LeicestershireLive he was in no doubt someone would buy the centre.
He said: "Obviously I'm sorry to hear the news. On the other hand the centre continues to trade and do that very successfully.”
Asked if he was worried about the future of the city centre, he said: "No actually I'm not. Interestingly I have been seeing the footfall in the centre continue to grow over recent weeks.
"Big shopping centres like these are obviously under enormous pressure due to things like inflation rates, and that is regrettable, but what we know is that people enjoy the centre and want to come here."
