Union Square to be sold in £110million deal

23/02/2024

ABERDEEN’S Union Square shopping mall is now under offer and looks set to change hands for £110million.

American private equity firm Lone Star is understood to be in advanced talks to purchase the mall, with a deal expected to be announced imminently.

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However, it appears that the disastrous mini budget of Liz Truss and Kwasi Kwarteng has knocked £40million of the value of the shopping centre.

Hammerson – who built and currently own the property – had originally been seeking £150million when it was put up for sale in 2022.

Brookefield was reported to have had the centre under offer at that time, but the deal fell through in the economic carnage which followed Truss’s 44-day stint as Prime Minister.

Union Square is a hybrid between a shopping centre and retail park, has footfall of around 15million per annum. It hosts 80 shops, restaurants and leisure options, including a 2,400-seat Cineworld cinema.

Lone Star’s deal values the mall, which is home to the likes of Hugo Boss, Apple, BrewDog, Zara and H&M, at £110million, and the deal looks set to close in the coming weeks.

It is understood that NatWest is also part-funding the the transaction.

Lone Star is a leading private equity firm advising funds that invest globally in real estate, corporate equity, credit, and other financial assets.

Since the establishment of its first fund in 1995, Lone Star has organized 23 funds with aggregate capital commitments totalling approximately $87billion.

When Union Square does change hands, it will follow a string of major American investment deals in Aberdeen.

California-based Reality Income has spent around £100million acquiring two retails parks in the city, the Beach Boulevard Retail Park, which it purchased from abrdn (formerly Aberdeen Asset Management) for £60million, and Berryden Retail Park, which it purchased from Mike Ashley’s Frasers Group.

Elsewhere, Zakir Issa, a sibling of the billionaire brothers who own Asda, recently secured the cut-price purchase of the Bon Accord Centre – once valued at over £200million – for under £10million.

He later snapped up the neighbouring John Lewis building for just £270,000.

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