Thames Tap has learned contracts have been exchanged in the acquisition of Reading’s Broad Street Mall by AEW – just as the investor seeks to sell another shopping centre in the region.

As exclusively reported in Thames Tap, the investor began carrying out due diligence on its acquisition of the 300,000 sq ft mall in late 2021.

That has now been completed and the sale by current owner Inception (Reading) SARL will complete this month.

The mall has planning permission for 422 flats above the 1970s building along with prior approval for 68 more flats in the Fountain House office block.

The acquisition is in line with investments in town centres around the country where developers and investors have looked to buy ‘air space’, effectively seeking the potential to develop high-rise residential above shopping centres.

However, AEW may review the existing permission to take account of current market conditions. The mall is next to the Minster Quarter regeneration site and the council is currently seeking a development partner for its scheme there.

The Castle Street site currently occupied by the police station is also likely to be subject to redevelopment so AEW’s acquisition would mean a possible collaboration with the owners of those sites.

The  purchase of Broad Street Mall adds to other major acquisitions made by AEW in Reading over the last 18 months, all of which are heavily retail and leisure led.

AEW bought a swathe of properties between Broad Street and Friar Street last year including, in Broad Street, the former Pret A Manger unit, former Next (soon to be Deichmann) unit, JD Sports, Shuh, Superdrug, Nationwide and the former Hotter Shoes unit, as well as Pop World and Sam99  in Friar Street.

And, earlier this year, AEW bought a 66,000 sq ft, mixed-use site  on the corner of Friar Street and Station Road which includes Revolution Bar, Pitcher and Piano, Q-Bar, Harris Arcade and County House.

Hicks Baker will be acting for AEW with joint agent Green & Partners.

The sale of the Broad Street Mall comes just as the AEW Europe fund has started the process of seeking potential buyers for its Festival Place investment in Basingstoke.

AEW Europe acquired the 1.1 million sq ft centre in 2015 and has since overseen significant improvements including a major upgrading of car parks and creating what it calls an ‘all-day destination’ with a number of food & beverage brands.

More than 20 new and renewed leases were agreed during 2021. Some of the more recent deals have brought Brewdog, Five Guys, Sketchers and Monsoon Accessorize to Festival Place

A spokesperson for AEW Europe said: “We can confirm that the potential sale of Festival Place, Basingstoke is under consideration but a formal process has not yet begun.”

AEW declined to comment on the Broad Street Mall acquisition.

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