Investors post interest in Birmingham’s Mailbox

Scheme’s retail element key to prospective purchasers’ bids

Mountgrange, Nurton Development with Moorfield, Westbrook and London & Stamford Property are lining up to buy Birmingham’s Mailbox.

Selling agents CB Richard Ellis and GVA Grimley began the marketing of the mixed-use scheme last week.
The price tag of £118m reflects a yield of 7.5% based on a “triple net income” – the income minus the cost of running the asset and collecting the rent.

One prospective bidder described the building as “the perfect opportunity fund asset”.
Only 640,000 sq ft of the 1.5m sq ft development, which sits on a 4.8 acre site, is for sale. The 200-bedroom Malmaison hotel and 200 flats were sold on the scheme’s completion in 2000.

The Mailbox comprises 140,000 sq ft of retail, 110,000 sq ft of bars and restaurants, more than 300,000 sq ft of offices, which includes 100,000 sq ft let to the BBC, and a 900-space car park. The total annual rental income for the area that is being sold is £9.4m.

Harvey Nichols, Emporio Armani and Hugo Boss are among the occupiers of 20 of the shops, but 13 units are vacant. Prospective buyers see leasing these shops a huge asset management opportunity.

Guy Webber, director at BWD Retail, who has been approached by prospective purchasers to advise on the sale, says: “From our conversations since the announced sale, it is apparent that there is already strong investor enthusiasm for the Mailbox.

It is, however, also apparent that the retail element is in the spotlight, while only accounting for 13%-14% of income.”
Prospective investors are also considering the possibilities for a vacant 45,000 sq ft unit in the scheme, which could be converted into offices, a food store or a showroom. It was formerly occupied by the Post Office. The space has been marketed for the past year.

The sale is an agreement between the directors of the holding company for the scheme, Birmingham Mailbox Ltd, which include Alan Chatham (pictured) and Mark Billingham, and Lloyds Banking Group and the Royal Bank of Scotland, which hold the debt on the scheme.

The property’s developer, Birmingham Development Company, which was run by Chatham and Billingham, was placed into administration in March last year. Neither the Mailbox nor Birmingham Mailbox Ltd is in administration.
In its latest set of accounts filed at Companies House for the year ending February 2009, Birmingham Mailbox Ltd’s net debt totalled £81.2m.

In a statement to Property Week, Chatham, director of Birmingham Mailbox Ltd, says: “In December 2010 we issued a press statement that said we were considering putting the Mailbox on the market in January 2011, subject to appropriate market conditions.

“We have now concluded our due diligence and have decided to put the Mailbox on the market with an indicative price of more than £118m. CB Richard Ellis and GVA are the selling agents.”

The neighbouring 50,000 sq ft mixed-use Cube, another Birmingham Development Company scheme, is in administration.
Lloyds is sole funder to the scheme but no formal sales process is ongoing. However, the proximity of the Mailbox to the Cube has led bidders to consider bidding for both.

Read more: http://www.propertyweek.com/news/news-by-region/investors-post-interest-in-birmingham’s-mailbox/5012640.article#ixzz1CzKDgzi8
propertyweek.com

Final bids to be posted for Mailbox
Lisa Pilkington 25/02/2011 12:00

Final bids for Birmingham's Mailbox will be called next week.

Alan Chatham's and Mark Billingham's Birmingham Development Company put the 1.5m sq ft property up for sale last year. They are seeking £118m, a 7.5% yield.

Bids are expected from Jamie Ritblat's Delancey with Chester Properties, Brockton Capital, Moorfield with Nurton Developments, Mountgrange, London & Stamford, and Westbrook Partners.

Agents CB Richard Ellis and GVA hope to achieve a sale by the end of April.

http://www.egi.co.uk/Articles/Article.aspx?liArticleID=730412

From EGI

Brockton is frontrunner for Mailbox
Bridget O'Connell 14/03/2011 08:00

Brockton Capital, the opportunity fund set up by David Marks and Jason Blank, is frontrunner in the race to buy Birmingham's iconic Mailbox.

The fund is understood to have bid close to £130m for the 1.5m sq ft mixed-use scheme - 7.5% above its £118m asking price. It would be the first major deal for Brockton in more than 18 months and follows the recent appointment of Tony Edgley, former head of corporate real estate at Jones Lang LaSalle.

Other shortlisted parties *battling for The Mailbox are Raymond Mould's and Patrick Vaughan's London & Stamford; Chester Properties with investment partner Delancey; and investment firm JO Hambro.

The Mailbox, owned by Alan Chatham's and Mark Billingham's Birmingham Development Company, was put up for sale through CB *Richard Ellis and GVA last year, as revealed by Estates Gazette (13 November 2010, p29).

The scheme was put on the market after consensual discussions between BDC and its lenders Lloyds Banking Group and Royal Bank of Scotland.

BDC had been in talks to sell the property - as well as its second phase, the 500,000 sq ft Cube, which is in administration - in April 2007. It appointed CBRE to sell the schemes for around £300m - a 5.5% yield. However, the sale was cancelled four months later after failing to achieve bids close to the asking price.

Just one serious bid was made for the Mailbox, which was being marketed at around £230m. It came from a joint venture between Rockspring Property Investment Managers and Chester Properties, which offered £185m.

The Mailbox comprises 200 flats, a four-star Malmaison hotel, 200,000 sq ft of offices and 100,000 sq ft of shops and restaurants.

I went into the Mailbox yesterday, Sunday 13th March 2011.

I went in the "front" entrance, and the temptation always seems to be to go up the escalators (most people seem to).

But I decided to walk along the ground floor.

And I have to say it was dead, about half the shops seemed to be empty.

Such a shame.

I went into the Mailbox yesterday, Sunday 13th March 2011.

I went in the "front" entrance, and the temptation always seems to be to go up the escalators (most people seem to).

But I decided to walk along the ground floor.

And I have to say it was dead, about half the shops seemed to be empty.

Such a shame.

You have spotted one of it's major design/configuration faults. As you say people naturally head straight for the escalators instead of going up the further set of steps at lower level. Kills the pedestrian flow totally.

I hope that the new owners make some fundermental changes to this area to try and improve the movement of people along the lower level.

You have spotted one of it's major design/configuration faults. As you say people naturally head straight for the escalators instead of going up the further set of steps at lower level. Kills the pedestrian flow totally.

I hope that the new owners make some fundermental changes to this area to try and improve the movement of people along the lower level.

Well the obvious solution would be to flip the front escalators back. The Harvey Nics entrance is the main draw upstairs anyway so the upper level won't necessarily lose custom.

To be fair, there are empty units upstairs as well.

I would say most people go up the escalators because they are merely using it to get to the canals at the back. And of course, reverse traffic takes people straight down to the bottom.

The escalators are nowhere near the Mailbox's biggest problem.

Can anyone with any knowledge of these matters hazard a guess as to how much it would cost for the Mailbox to fund the extension of the Metro to up outside their front gate?

That's if Centro would even let them do it considering the medium-term plan is for it to head from the station up to Victoria Square.

75% of the shops on the lower level are now empty, it's a real shame

The retail end of the Mailbox really has flopped in recent years.

When it opened in a blaze of glory, they proudly said that there "more designer shops in there than the whole of Manchester!" I doubted it at the time, it certainly isn't the case now.

I must admit I thought the occupation of the offices and presence of the BBC would turn around the fortunes of the shops, but clearly not. It really does need a new owner and some new impetus; i still believe it could work.

A lot of the shops are their own worst enemies - either so expensive that they prohibit a large part of the market, or so overstaffed that the overhead must kill them.

The BBC may have worked if the numbers that had work at Pebble Mill worked in the Mailbox.

Be interesting to see how the new owners try and reverse the problem.

Brockton Capital first to the Mailbox
Investor makes debut purchase for new £500m opportunity fund

Article posted: 21 Mar 2011
A former Royal Mail sorting office in Birmingham is close to being sold to investment company Brockton Capital.


The London-based investor and asset manager beat off competition from Chester Properties and London & Stamford to deliver the winning bid for the Mailbox.


The purchase will be a debut acquisition for Brockton’s new £500m opportunity fund which is thought to have bid in excess of the £118m asking price, reflecting a yield of around 7.5%.


The 1.5m sq ft property was purchased in 1998 for £4m. The residential and hotel component of the scheme was sold in 2000. Brockton will be purchasing the remaining 640,000 sq ft of retail, restaurants and office space at the iconic Birmingham property, giving them an annual income of around £9.4m.


For breaking news relating to office space in the West Midlands follow us on http://twitter.com/officespacenews

Posted by Jules

http://www.freeofficesearch.co.uk/OfficeSpaceNews.asp?NewsID=00001051&monthnameyear=March2011

Confirmed that Brockton Captial have bought the Mailbox.


Mailbox in Birmingham sold for nearly £10m above asking price

* By Alun Thorne
* Apr 6 2011


The Mailbox in Birmingham has been sold to Brockton Capital for almost £10m more than the asking price.

The iconic mixed use scheme in the heart of the city has been acquired for £127.1million from Birmingham Development Company.

Brockton Capital, acting on behalf of Brockton Capital Fund II LP, has acquired the development in a partnership with Milligan.

The deal comprises 640,980 sq ft of office retail and restaurants with current tenants including the BBC, Network Rail, Harvey Nichols, Emporio Armani and Thomas Pink.

David Zimmermann, a partner of Brockton Capital, said: “Brockton Capital is excited to have invested into The Mailbox, one of the city’s most iconic buildings.

"The innovative work of Birmingham Mailbox Limited in converting the giant former sorting office into a thriving mix of offices, restaurants, shops, hotels and apartments has been transformational for the centre of Birmingham.”

He added: “Brockton Capital and Milligan will be looking to build on Birmingham Mailbox Limited’s good work at The Mailbox.

"We have earmarked substantial funds to enhance the building in order to further improve the public realm, bring in new businesses, shops, restaurants and other leisure uses to the asset and to further cement its reputation as one of the best places in the city to work, shop, eat and relax.

“We look forward to working closely with the city’s residents, businesses, retailers, visitors, planners and councillors in order to help bring this about.”

The sale of the Mailbox will bring to an end Alan Chatham and Mark Billingham’s association with the development which they brought to the market more than a decade ago.

The scheme has since suffered from a significant fall in commercial property values and the sale followed an agreement between BDC and the Mailbox’s banks.

Brockton Capital LLP was advised on the acquisition by Jones Lang LaSalle, Shelley Sandzer, Gleeds, BDO LLP and Nabarro LLP.
The vendor was advised by CB Richard Ellis and GVA and Eversheds.

Read More http://www.birminghampost.net/birmingham-business/birmingham-business-news/commercial-property-birmingham/2011/04/06/mailbox-in-birmingham-sold-for-nearly-10m-above-asking-price-65233-28469700/#ixzz1IjpiwF7S

The BBC may have worked if the numbers that had work at Pebble Mill worked in the Mailbox.

Be interesting to see how the new owners try and reverse the problem.

Well, I argued for a long, long time that there should be a Boots store in there, not only for prescriptions but for perfumes and other upmarket goods. Those that live in the Mailbox seem to be quite health conscious and judging by the amount of the fresh food that seems to fly out of the door in that Tesco Express (according to my girlfriend) there must be room for a place that sells the stuff that the Tesco can't sell/specialise in.

Big high street names with an upmarket brands should be peppered in there at some point - The back facing the canal however, different story.. especially during the summer..

The retail end of the Mailbox really has flopped in recent years.

When it opened in a blaze of glory, they proudly said that there "more designer shops in there than the whole of Manchester!" I doubted it at the time, it certainly isn't the case now.

I must admit I thought the occupation of the offices and presence of the BBC would turn around the fortunes of the shops, but clearly not. It really does need a new owner and some new impetus; i still believe it could work.

A lot of the shops are their own worst enemies - either so expensive that they prohibit a large part of the market, or so overstaffed that the overhead must kill them.

The worst aspect of The Mailbox is the access to it from under the Ring-road. I always thought that the access would put people off and remember that a number of people get to Brindley Place via the ICC area not through The Mailbox.

I think its an issue with signage aswel, theres hardly any signs pointing out the mailbox and from the mailbox theres nothing that im aware of that lets visitors know you can access brindley place and broad st from the canal at the back?

Interesting article from this weeks Estates Gazette:
Mailbox owners put stamp on new tenant mix
09/04/2011 00:06


The new owners of Birmingham's iconic Mailbox are working up plans to improve the tenant mix on the 1.5m sq ft estate, including bringing in supermarkets and a cinema.

Brockton Capital this week confirmed that it had bought the mixed-use scheme for its £500m Brockton Capital Fund II, a deal revealed by Estates Gazette last month (12 March, p36).

The fund manager has paid £127.1m, with John Milligan's Milligan Retail taking a minority stake.

The Mailbox, home to the Birmingham branch of Harvey Nichols, contains 650,000 sq ft of lettable space in addition to two hotels and 144 flats let on long ground leases.

Alan Chatham's and Mark Billingham's Birmingham Development Company put it up for sale through CB Richard Ellis and GVA last year, after consensual discussions with lenders Lloyds Banking Group and Royal Bank of Scotland.

Brockton co-managing director David Marks said: "We will be sticking with luxury retail but there are lots of other uses that residents in and around the Mailbox may want, such as food stores and a cinema."

Brockton was advised by Jones Lang LaSalle and Shelley Sandzer.

Sounds positive and good to note they are sticking with Lux retail.

I know of Brockton but don't much about Milligan however, it looks like they specialise in repositioning retail schemes.

They worked on the Metquarter in Liverpool and Triangle in Manchester.

http://www.milliganretail.com

Hmm a cinema, maybe a waitrose for the supermarket.. where would the cinema go!? That would get mailbox where it needs to be i think

Yeah a cinema and waitrose or m&s simply food would pull in the footfall, deffinatly looking positive

There is huge empty space on the bottom floor behind the escalators. I think something like Cinema De Lux would be perfect for Mailbox
http://www.spg3.com/projects/Fantasy-Entertainment/NAIShires.jpg

Hmm, would be OK to see a cinema here, I guess... Wouldn't be my first choice for the Mailbox but I guess they need to look at diversifying some more.

Would still love to see a cinema on the Martineau Galleries site.

Yeah a cinema and waitrose or m&s simply food would pull in the footfall, deffinatly looking positive

I doubt M&S would make much difference but I could see Waitrose giving it a good go. And I most definitely think that both Waitrose and Tesco Express can co-exist partly becasue of their opening times but also because they'd serve different areas and people. That Tesco Express is rammed at lunchtimes and on lazy weekends in the hot summer weather whereas Waitrose will serve people in the residential areas for a full shopping trip. Plus it'll give some much needed competition.

Interesting idea for a Cinema or even a Waitrose. I've been to the Showcase 'De Lux' in Leicester, it really is a fantastic cinema.

Im hoping to see more Bars and Restaurants, like the ones already on the canal side, open up in the Cube, especially in the Canal side units.

Nope, The Cube is going to be sold separately.

Sorry, I re-read the original articles and edited my post.

One of the main problems I think with the Mailbox, is getting to it from New street, there is no real direct pedestrian friendly route to the place.

...

They should open one of these

Cinema De Lux

http://en.wikipedia.org/wiki/Cinema_de_Lux

http://uk.westfield.com/derby/cinema/

They should open one of these

Cinema De Lux

http://en.wikipedia.org/wiki/Cinema_de_Lux

http://uk.westfield.com/derby/cinema/

did you miss the big picture at the top of the thread?

One of the main problems I think with the Mailbox, is getting to it from New street, there is no real direct pedestrian friendly route to the place.

That's what I referred to in an earlier post. The Inner Ring road is the problem. I think a shuttle bus was suggested as a means of getting to The Mailbox, but either did not operate or did not last long.

The Inner ring road is no problem at all, The subway is huge, well lit, clean and well signposted. Its a very busy pedestrian route because it is friendly. Access is not a major issue facing the Mailbox, the only real problem it has is addressing the right balance of tennents.

A Cinema or Waitrose would be the boost the complex needs.

I think Suffolk Street Queensway is part of the problem but not a major one. Yes, the subway is very well lit and open but it still presents itself as a major psychological barrier. It appears as a hurdle even when it really isn't. When people picture the route to the Mailbox from New Street, it is the stand out feature along the way which they must interact with.

It could easily be tackled by providing a greater draw towards it. By that, I mean more shops along the route to the Mailbox, although the huge voids by New Street station make that a no no - although John Lewis should go a long to sorting things. Smallbrook Queensway developing more as a result of the New Street station redevelopment would be very beneficial, and would be further helped by a redevelopment of the buildings between HCT-Westside, and The Sentinels-Queensgate, on either side of the road.

In due course, the boulevarding of Suffolk Street Queensway would have a major effect for the Mailbox, but isn't necessary.

Tenants is definitely another issue, although my belief is that the up-market sort of stuff just doesn't have a place here just yet, at least not in such a concentrated form. Given the area it is in, the Mailbox is like an isolated cocoon of high end shops which serve such a small number of people who can genuinely afford it. Who and where is the market that it targets in the city centre? It needs bringing back down to earth really, and the past couple of years have done that to some extent, for the short term. This is why I don't like the cinema idea as this is a very long term, populist sort of thing that would change the nature of The Mailbox for a long time.

The Inner ring road is no problem at all, The subway is huge, well lit, clean and well signposted. Its a very busy pedestrian route because it is friendly. Access is not a major issue facing the Mailbox, the only real problem it has is addressing the right balance of tennents.

A Cinema or Waitrose would be the boost the complex needs.

Subways are a no-no. That's been proven by the filling in of most of them in the city. People want to be above ground and not enclosed in 60's concrete no matter how well lit.

Subways are a no-no. That's been proven by the filling in of most of them in the city. People want to be above ground and not enclosed in 60's concrete no matter how well lit.

But its not even a subway, its open at both sides because the Smallbrook Queensway is actually a bridge! The land on either side of is the same height as the subway itself meaning its not even subterranean.

But its not even a subway, its open at both sides because the Smallbrook Queensway is actually a bridge! The land on either side of is the same height as the subway itself meaning its not even subterranean.

OK, but you called it a subway and to all intents and purposes, it is. I think it is an Achilles heel and other people have told me the same. In fact , the Inner Ring road, what remains of it, is a straight-jacket. Look at the cutting off of the Jewellery Quarter. Another 50's/60's mistake.

Well thats just ridiculous, its never been a problem for Brindley Place or Broad st both of which sit outside the Inner ring road in relation to the core. The Mailbox is a destination venue, as such it needs to attract people to it, infact the bars and restaurants at the back are always busy. Its the retail element which need addressing.

As for the Ring road, there is absolutely no chance what so ever that it will be removed. It is the life blood of the city, remove it and the city centre would grind to a complete halt.

As i've said before, if the metro was extended over to Mailbox, it would work out

Where possibly would a cinema go anyway? The supermarket would go under by the escalator

did you miss the big picture at the top of the thread?

I was beaten to it :bash:

hmm what about opening two units either side of the "subway" underneath the road where the current car park and paved area is? would liven up the route towards the mailbox and make it more friendly?

I have always thought some retail units in glass boxes within the space would be nice. I've seen something similar somewhere abroad

^^ thats what I was thinking floor to ceiling glass, I think it would be best suited for a convinience store or cafe, couldnt see a clothing retailer or something opening there

Very good idea that is! shame it won't happen

I think the best solution for this area would be to demolish the elevated viaduct and lower Suffolk Street so it has gradual incline from Holloway Circus. Secondly, both sides of the roadway could be lined with London Plane trees; shrubbery behind the trees would hide the road and also soften its impact. Thirdly, a wide contemporary footbridge connecting from the Mailbox entrance spanning horizontally above the road to a newly built square where the Red Cage car park is now...........:)

1 word = Money

Brockton Capital and its retail specialist partner, Milligan, have begun a detailed review of the shopping provision in its newly acquired scheme, the Mailbox

The £127.1m asset was bought from the administrators of Birmingham Mailbox last month, a company founded by local developers Alan Chatham and Mark Billingham.

The 640,980 sq ft scheme has 200,000 sq ft of offices, 150,000 sq ft of retail, 70,000 sq ft of restaurant space and a 686-space public car park. “With Milligan, we are evaluating our options in terms of a physical reorganisation, marketing ideas and what other tenants we might be able to bring in,” says Tony Edgley, partner at Brockton.

“We are envisaging that it must stay as a high-end offer, because the Bullring is incredibly successful as a mid-price centre and it is pointless trying to compete in that way. Years of hard work would be tossed out.”

Milligan is a minority investor in the asset, which is held in a special purpose vehicle within Brockton’s Brockton Capital Fund II. One of its first tasks will be to decide on the future of a 40,000 sq ft empty space at the back of the building’s first floor.

“We have our eyes wide open. We could make it the funkiest office space in the city, more akin to a Soho loft than the likes of Brindleyplace,” says Edgley. “Equally it could be a Waitrose, but we don’t want a furniture store, as we want a footfall driver and for it to be busy.”

http://www.propertyweek.com/news/brockton-ponders-mailbox’s-future/5017338.article

Most likely be a waitrose then! Hopefully!

Waitrose would definitely bring in people, if signed right too

Here's a random photo i got on a little walk around town

http://farm6.static.flickr.com/5108/5666450906_167256d786_b.jpg

Saw some guys from Gleeds surveying the front of the Mailbox during the last couple of days.

We should hopefully see some details of the reconfiguration plans by the end of the year.

Miller & Carter - where the Ha Ha Bar was

http://farm7.static.flickr.com/6003/6006160741_f1483e7c38_b.jpg (http://www.flickr.com/photos/ell-r-brown/6006160741/)
Miller & Carter - Stakehouse-Bar-Grill (http://www.flickr.com/photos/ell-r-brown/6006160741/) by ell brown (http://www.flickr.com/people/ell-r-brown/), on Flickr

http://distilleryimage9.s3.amazonaws.com/0f15f5c67de611e18bb812313804a181_7.jpg

40,000 sq ft is a tough size to let in the city I guess... too big for most retailers, but too small for a department store.

It needs a bit of imagination... Some sort of tourist attraction wouldn't be a bad thing, or is it too small for the City's modern art collection? Exhibition space for the big touring exhibition like the Titanic/Dr Who/Star Wars/James Bond type thing?

Those are just off the top of my head, I'm sure people on here could think up something better.

What about a Legoland Discovery Centre

http://en.wikipedia.org/wiki/Legoland_Discovery_Centre

We were told by the new owners a couple of months back that they would be making some big announcements shortly about new tenants, guess that was a bit pre-emptive.
There is a pretty hefty footfall threough the Mailbox these days, can only imagine the rents are too high.

I originally thought a Lego Discovery Centre but I don't think it would fit in well with the Mailbox, It would bring the footfall but unless they changed the market of the mailbox to mixed retail instead of high end retail, I doubt it would do much for them in terms of retailers. Waitrose, M&S Simply Food, a high end food market or cinema du lux would work best in the large unit

We were told by the new owners a couple of months back that they would be making some big announcements shortly about new tenants, guess that was a bit pre-emptive.
There is a pretty hefty footfall threough the Mailbox these days, can only imagine the rents are too high.

Yep.. what strikes me is the lack of independent shops in there - boutiques that could potentially cater for high end fashion...

Interesting article in EG regarding the problems at the Metroquarter in Liverpool. Very strong parallels with the Mailbox.

Metroquarter: the upmarket downer
By Annabel Dixon | Retail | 26-05-2012 | 07:00 | Print
Billed as Liverpool's Bond Street, the 133,000 sq ft Metquarter shopping centre in Liverpool opened to great fanfare in 2006 as the go-to destination for the city's WAGs.

In mid-2007, just as the retail investment market was beginning to cool, developers Milligan, Richardson Developments and JW Kaempfer sold the glitzy mall to Anglo Irish Private Banking and Alanis Capital, the investment vehicle of the Dublin-based McCormack family. It fetched around £87m, a yield of circa 5%.

That price was £10m below asking, but today it looks positively eye-watering as the very same shopping centre is brought to the market at 70% less than it sold for in 2007.

Last week, Estates Gazette revealed that Savills had been appointed to sell the Metquarter for around £25m – a circa 8% yield – in a consensual sale led by Irish Bank Resolution Corporation, the vehicle set up to wind down Anglo Irish (p41).

The Metquarter was one of a number of investments Alanis and Anglo Irish teamed up to buy during the property boom. Other shopping centres they jointly own include the 240,000 sq ft Kennet mall in Newbury, Berkshire, and the 80,000 sq ft Royal Exchange in the City of London.

They were thought to be included in the proposed sale of the property arm of Anglo Irish Private Wealth to Green Property in 2009 and then to Key Capital earlier this year. However, both deals collapsed. IBRC will now try to sell the properties itself individually over five years, with the Metquarter likely to be the first on the block.

When the Metquarter opened, it boasted 40 upmarket tenants – 39 of which were new to the city – such as Armani Exchange and LK Bennett.

Many of the retailers are understood to have opened on lease deals with rent increases linked either to inflation or turnover, rather than rent reviews. Both the landlord and tenants profited from the model when income levels were at the top of the market.

However, since then, the Metquarter has been buffeted by the cold headwinds in the wider retail market. Retailer collapses at the mall have included Miss Sixty, jewellery retailer Azendi and its anchor store, Flannels.

Since 2008, the Metquarter has also faced stiff competition from Grosvenor's 2.4m sq ft retail-led development, Liverpool One.

"Liverpool One has had a huge impact," says one source. "The Metquarter got to within 98% occupancy in 2006 and then Liverpool One hit it. It took the likes of Karen Millen, Coast and Hobbs. Metquarter's anchor store, Flannels, went into administration but stayed in Liverpool One [after it was rescued]. The Metquarter has lost tenants because it can't match Liverpool One [on deals]. The retailers can play landlords off against each other."

But Peter Burke, head of retail and a director at Mason Owen, argues that the blame cannot be pinned on Liverpool One. "If anything, Liverpool One has made Liverpool a stronger retail destination," he says. "But, in terms of value, the Metquarter was sold far too high. It's a victim of general economic conditions. The Metquarter set itself firmly at operators that are not looking at high footfall but high spend."

In recent years, the Metquarter has been fighting back. IBRC and Alanis have driven a clutch of new lettings at the scheme - many of which have been on traditional leases. It has secured Carluccio's, cosmetic brand Illamasqua and Patisserie Valerie as well as Jack Wills for the former Flannels store. Much of the centre is now let: around 75% of the total space (or 66% by shops) is occupied.

So who will take on this investment? Sources say there are around 15 to 25 parties that could be interested in the potential acquisition of the mall. Interest is likely to come from property companies and opportunity funds which like turnaround projects.

"It will attract interest. The big question is whether an investor can come up with a role for the centre in Liverpool's retailing future," says one investment agent. "On a capital value per sq ft basis, it looks good value, and certainly appeals at the price relative to the original build cost."

Milligan paid £17m for the site and paid Carillion £23m to build the centre. "But the bargain price tag is not enough of a reason to buy it," the agent adds. "You need to know you can keep it full of retailers and generate a future stable income stream."

Others warn that any new owner will have to redesign the centre to make a deal stack up. They argue that there is simply too much retail space in Liverpool now and that any new owner of the Metquarter will have to ensure the mall has a different offer to contrast with the mass market of Liverpool One and nearby Church Street. They claim that part of the Metquarter may even have to be converted to homes or leisure facilities.

"It is difficult to see the future for Metquarter in its current configuration arranged over two levels and 45 shop units, and hence significant reconfiguration or redevelopment and partial change of use are the most likely options for any owner," says Cushman & Wakefield's chief executive of retail, Justin Taylor. "Metquarter has inevitably suffered from having no anchor store or onsite car parking and has been completely overshadowed by Liverpool One."

"The interest will whittle away fairly quickly when parties realise the detail to the [amount of work involved]," adds another agent. "The Metquarter has fantastic tenants, but there is a lot of work to do."

Opened in 2006, sold for £87m in 2007 and now set to go on sale again for £25m - Annabel Dixon reports on Liverpool's Metquarter shopping centre's bumpy ride.

^^ similar in terms of core retail but the major saving graces are the canal side location at the rear, the restaurants and bars - which are now heaving as we speak, Harvey Nics and Tesco Express - Should the Mailbox stay as a mixed retail led development or should they find a more office and leisure led mix - It'd certainly grab tenants because of it's close proximity to the station and future tram stop.

^^ similar in terms of core retail but the major saving graces are the canal side location at the rear, the restaurants and bars - which are now heaving as we speak, Harvey Nics and Tesco Express - Should the Mailbox stay as a mixed retail led development or should they find a more office and leisure led mix - It'd certainly grab tenants because of it's close proximity to the station and future tram stop.

I love this part of town on a barmy summers evening, GAWJUS :cheers:

I noticed the door men in Harvey Nicks were counting people in this week, must be checking footfall.

From Business Desk

Mailbox in line for major re-vamp

THE Mailbox in Birmingham is likely to face significant change over the coming years, owner Brockton Capital has hinted.

Speaking at a meeting of the Investment Property Forum at Barclays’ Latitude Club in Snowhill, David Zimmermann, a partner in the real estate investment firm, said: “Walk through The Mailbox and you will see what is good about it. Walk through the shopping part and you will see what needs to be fixed.”

Asked whether the building and its constituents were likely to remain the same physically, he remarked: “Unlikely.”

Questioned after his speech about Brockton Capital’s vision for The Mailbox, Zimmermann said a plan has been formulated but the company was not going to launch it publicly, but start implementing changes which the public would notice over time.

Zimmerman’s comments strongly suggest that Brockton plans to extend the bar and restaurant offering at The Mailbox and to reduce the presence of the less successful retail offering.

Talking about The Mailbox generally, he said: “The capital structure was completely broken when we bought the estate.”

“We bought it at a level that reflected the good underlying income in part of the building which we were able to leverage off. We also saw great upside in the flexibility of the space and new uses and occupiers that could be added.”

Brockton Capital - which bought The Mailbox for £127.1m from Birmingham Mailbox Ltd early last year - is not averse to risk where it could see an opportunity and commensurate returns, Zimmermann said.

He told the meeting that opportunities still existed in tough times, but emphasised: “We are pickier than we were before. For us it is all about the real estate fundamentals on an investment.”

I'm glad this is being addressed. It's a tough retail sell on the periphery on the retail core. I hope they come up with something imaginative...

good to hear, Hopefully it will done quickly rather than be a long drawn out process

There's not much they need to do to the looks of Mailbox, it looks fine already, its tenants they need to focus on.

Putting a roof on it might be a start... it's the same with the Cube, getting rained on while you shopping isn't fun.

But a large tenant which will drag people from New Street is important.

Planned works to the area outside Tesco as a precursor to the main refurb:

http://eplanning.birmingham.gov.uk/Northgate/DocumentExplorer/Application/FolderView.aspx?type=eplprod_DC_PLANAPP&key=587661

I've heard of some quite radical changes and re-arrangment.

Some existing tenants are moving, others going. Some of the ideas around interaction with the other side of Suffolk St were almost exciting...

The design & access statement gives a hint of bigger changes coming.

Putting a roof on it might be a start... it's the same with the Cube, getting rained on while you shopping isn't fun.

But a large tenant which will drag people from New Street is important.

Would food shopping work here? Or too risky? Retail just hasn't quite worked has it. Harvey Nichols has a good spot though. I'm not sure more bars and restaurants would work? Maybe one or two more. I honestly don't think placing a roof on top will make an ounce of difference to wheather people shop here or not.

Whatever goes here it needs to compliment what works already, shame the BBC couldn't have invested more into this building, how about film and media? That would make more sense.

HARD ROCK CAFE would do well at The Mailbox, it would be heaving at weekends, unlike its other half hearted attempt of a restaurant at the top of Broad Street a few years ago.

HARD ROCK CAFE would do well at The Mailbox, it would be heaving at weekends, unlike its other half hearted attempt of a restaurant at the top of Broad Street a few years ago.

If it didn't work on Broad Street I can't see it working here and it's very 1990s.

The trouble with bars and restaurants here is there are probably far more inspiring locations than where the main core of shop units are here, which are effectively sandwiched between Harvey Nichols/Front Entrance and The more attractive canal side entrance where the concentration of restuarants are- The bit in between is always going to be a walkway between the two.

Offices or creative space seem to make more sense in this central bit, at least it would increase the profitability of the existing bars on the canal front and make it more of a destination. Also, noise travels in that canyon, I'm not sure the residents would appreciate noisy bars below. I certainly wouldn't.

I've heard of some quite radical changes and re-arrangment.

Some existing tenants are moving, others going. Some of the ideas around interaction with the other side of Suffolk St were almost exciting...

and backs up the hint I got about a roof going over the Mailbox complex. Major stuff happeneing. i can't read the PDF D&A statement but I assume that they're talkink about making extensions and stuff? And food shopping was supposed to be brought here but there with eithe M&S or Waitrose but the last management had some sort of argument with them. A shame because that unit at the back would have been good to take up as a Metro style food retail store.

I think the D&A only mentions that the proposed works fit in with other internal improvements being considered

and backs up the hint I got about a roof going over the Mailbox complex. Major stuff happeneing. i can't read the PDF D&A statement but I assume that they're talkink about making extensions and stuff? And food shopping was supposed to be brought here but there with eithe M&S or Waitrose but the last management had some sort of argument with them. A shame because that unit at the back would have been good to take up as a Metro style food retail store.

The city centre does need a really classy food hub for all the new city centre living. There area few delicatessens and patiseries already dotted around, but would be nice to have something really special in one place which could encourage people from outside the city to come in to shop for the special stuff, you could even get a few market stalls in there I am sure. A waitrose would be great and would I am sure draw other smaller shops. Incidentally there is a great bakery, wine store and various other high grade food stores in Great Western Arcade now.

It would be ncie to somehow link any potential Mailbox hub with the Indoor Markets which I personaly think are fantastic and we should be shouting about a lot more, they fare very well from food markets I have been to across the world which are 'supposed' to be top banana!

Restaurants and bars are the Mailbox's stength so I think the vacant space at the back would make a great food hall where you could franchise it out to restaurant and grocer operators Selfridges Food hall style by keeping it open plan. Think it would be a really help to make it a more destination place to shop and eat.

Whole Foods at the Mailbox would be a great thing for Birmingham. London stores are great. they were planning one back in 2008/2009, so l hope they think about the idea again and go for mailbox.