350 homes planned for £17.6m Farnborough shopping centre

A shopping centre in Farnborough may become the site of 350 homes following its £17.6 million purchase by Sovereign Housing Association.

Sovereign has bought Princes Mead Shopping Centre along with two adjacent retail assets from Knight Frank Investment Management (KFIM), who owned the centre in partnership with Local Pensions Partnership Investments (LPPI).

The sale represents an 8 per cent net initial yield.

Tom Titherington, Chief Investment & Development Officer at Sovereign Housing Association, said: “We are delighted to have acquired our second shopping centre, with a view to the longer-term regeneration potential of the site. 

“As our high streets evolve, it becomes increasingly important for forward-thinking housing associations such as Sovereign to take a proactive role in regenerating our town centres, supporting our customers through the delivery of affordable homes and the successful re-imagination of our high streets.”

The 7.77-acre town centre site represents a significant purchase in the borough of Rushmoor for the 61,000-home association, where it hopes to develop a mixed-use, mixed tenure, residential development.

The purchase feeds into Sovereign’s wider aims to support the regeneration of towns and high streets while meeting demand for affordable housing. It also compliments regeneration plans for Farnborough town centre which Rushmoor Borough Council and the Rushmoor Development Partnership are working on.

This Civic Quarter plan features a new leisure centre, civic hub and park, 1,000 new energy efficient homes along with new restaurant, food and beverage areas. Sovereign’s re-development of Princes Mead could be finished prior to the completion of the first phase of these plans.

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As part of the terms of the agreement, KFIM and LPPI will continue to be involved in the development project as overage partners.

John Styles, Partner at Knight Frank Investment Management, said: “Having worked with Rushmoor to establish support for a substantial residential-led development scheme we are delighted to have sold the site to Sovereign Housing Association. 

“We are confident that Sovereign will take the project forward maximising the benefits, particularly in terms of affordable housing provision for Farnborough.”

Sovereign were advised on the deal by JLL, Ellandi and Winckworth Sherwood, while Montagu Evans and DWF Law advised KFIM.

Adrian Peachey, Partner at Montagu Evans, said: “As town centres evolve and new partnerships – both public and private – are necessary to deliver on these opportunities, dynamic new types of investors are stepping forward.

“This is a deliverable development opportunity with strong alternative use value, which is supported by the local authority and forms part of their wider town centre regeneration plans.

“Farnborough has an active and growing residential market and this opportunity will help rebalance the town centre offer as well as meeting local housing demand.”

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Featured image credit: Sovereign Housing Assocation.