Capital & Regional signs leases on two BHS spaces

UK-focused specialist property real estate investment trust Capital & Regional announced on Friday that it exchanged two long-term leases for its former BHS units at The Mall Blackburn and The Mall Walthamstow, bringing new occupiers Wilko and the The Gym Group into the schemes and apparently delivering significant increases in passing rent.

The London-listed firm said at The Mall Blackburn, Wilko has signed a 10 year lease to take the entire 25,000 sq ft ground floor space that was previously occupied by BHS, representing the retailer's first store in Blackburn and reportedly delivering a strong uplift in passing rent.

Its board said that was building on recent letting momentum with Burger King, Game, Costa Coffee and Krispy Kreme all opening in the scheme by year end.

The new Wilko store is expected to open in the first half of 2017 following a refurbishment of the unit.

At The Mall Walthamstow, The Gym Group has taken a 20 year lease on the 15,000 sq ft first floor space in the former BHS unit.

The opening of the new 24 hour gym, which is scheduled for mid-year 2017, came about as part of the company’s strategy to introduce a broader mix of tenants and uses at Walthamstow, where the board is advancing plans for an 86,000 sq ft retail and leisure extension.

Capital & Regional is also in advanced legals with a major food retailer to take 18,000 sq ft of the remaining 25,000 sq ft ground floor space at the unit, with strong interest reported from a number of occupiers for the final 7,000 sq ft.

The company said it expects to significantly increase the rental income from that paid by BHS through the combined lettings.

There was good progress at Maidstone and Redditch, the board added, in negotiations with major national retailers to take single occupation of the former BHS units at each of those schemes.

“These lettings are significant in that they show the rapid progress we are making in re-letting the BHS space, growing income from previous levels while further improving our tenant mix and leisure offer,” said Capital & Regional investment director James Ryman.

“Wilko will significantly strengthen the convenience proposition at Blackburn and the addition of The Gym in Walthamstow forms a key part of our transformational plans for a location that is emerging as one of London's most vibrant neighbourhoods.”