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Revealed: the York shopping centre taken over by administrators

The Coppergate Centre, York. Photographs: Richard McDougall

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Business, News, Shopping

Coppergate owners insolvent six months ago

Big name tenant set to leave

Centre ‘continuing to trade as usual’

 

One of York’s main shopping centres is being run by administrators after its owner became insolvent, YorkMix can reveal.

Coppergate Shopping Centre has been in the hands of the business recovery team at Pricewaterhouse Coopers (PwC) for fully six months – since June 30, 2014.

The Coppergate Centre was opened in 1984

It covers 200,000 sq ft and big name tenants include Fenwicks, Boots, Top Shop and the Jorvik Viking Centre

In 2008 the centre and adjoining properties in Piccadilly were sold to the American-owned company LaSalle Investment Management

That was the date when its owner, LaSalle UK Ventures Property 8 S.A.R.L., went into administration, owing creditors £45 million.

We can also reveal that one of the big-name tenants of the Coppergate Centre is leaving next month.

The Starbucks franchise in the centre will close its doors on February 10, 2015 after reportedly finding the business was not viable.

A spokesperson for the Coppergate Centre told YorkMix that it has continued to trade as normal since the owner went into administration.

The spokesperson said:

Partners at PwC were appointed administrators to the company which owns the Coppergate Shopping Centre in June 2014.

The centre is continuing to trade as usual and shortly following the appointment of administrators a new centre manager, Sue Anderson-Brown, was appointed.

Decision kept under wraps

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Trading as usual… the Coppergate centre
However, the fact that the centre’s owner was insolvent has been kept under wraps.

When it was announced that Mrs Anderson-Brown was the new Coppergate Centre manager, media reports made no mention of the owners going into administration.

This is how the York Press reported the news on Tuesday, September 4, 2014:

Sue Anderson-Brown joins the Coppergate Shopping Centre with more than 30 years management experience encompassing retail shopping centres, facilities management and commercial property ventures.

Her appointment follows the departure of previous manager Deb O’Donnell who left to take the centre manager position at the new £90 million Vangarde Shopping Park, and the arrival of new owners Cogent with management agent Capita, which took on the shopping centre from LaSalle.

Coppergate’s former owners

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The sign outside the Coppergate Centre office states: ‘Managed by La Salle Investment Management’
The ungainly named LaSalle UK Ventures Property 8 S.A.R.L., described by Companies House as a “property ownership, leasing and management” company, is registered in Luxembourg.

It is an investment vehicle created to buy the Coppergate Centre by LaSalle Investment Management.

Previous Coppergate Centre owners Land Securities sold the site to LaSalle in spring 2008, after failing to get permission to develop the Castle-Piccadilly site.

The official documentation of the sale described the new owners as

LASALLE UK VENTURES PROPERTY 8 S.A.R.L. (incorporated in Luxembourg) care of Lasalle Investment Management, One Curzon Street, London W1J 5HD.

It paid £36.9 million for the Coppergate Centre on March 28, 2008.

On the same date, another LaSalle subsidiary – Lasalle UK Ventures Property 10 S.A.R.L. – paid £4.59 million for the Ryedale Building, 60 Piccadilly, York, better known as Ryedale House. That subsidiary is also in administration.

Documents from the administrators reveal that the company which owned the Coppergate Centre owed £45 million to creditors.

Its biggest creditor was Nationwide Building Society, which loaned it the money to buy Coppergate – it is owed £26 million.

Among the other companies owed money are York firms Deepclean and John Wright Electrical Services.

Starbucks out, Primark in

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Starbucks in the Coppergate Centre
Staff at Starbucks, which occupies unit 16 of the Coppergate Centre, were told last week that the branch will close in February, as it was not financially viable.

Here’s what the Coppergate Centre spokesperson told YorkMix:

Whilst Starbucks has chosen not to renew its lease, we are in advanced negotiations to secure a new and exciting, high end tenant for this unit whom we feel will fit well with the Centre and the future strategy.

Meanwhile clothing chain Primark is still due to take over the former Marks & Spencer store on Coppergate, vacated when M&S moved to the Vangarde Shopping Park at Monks Cross.

To facilitate Primark’s Coppergate move, York council agreed plans to extend the M&S building by 10,500 sq ft.

This is part of a two-store strategy, which would see Primark also take over M&S’s unit at Monks Cross.

A letter from Eric Hall of TDH Estates, the agent for Monks Cross Shopping, revealed that the Coppergate move had been delayed by the shopping centre’s owners going into administration.

On September 12, 2014, he wrote in a letter to the council:

In the event, progress on the Coppergate site has been very slow, it now appears because of commercial/ viability matters, indeed the company that owned the unit at the time of the consent has been put in to administration.

But he added that the move was still due to go ahead:

Moreover it is understood the Council have been advised that it is the intention of the administrator to complete an agreement for lease in respect of the former M&S store at Coppergate.

Fears over city centre retailing

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Marks & Spencer has left Coppergate, but Primark is due to move in to this store
The fact that the company set up by Lasalle Investment Management to buy and run Coppergate Shopping Centre became insolvent will reignite the debate about city centre retailing versus out-of-town development.

LaSalle scaled back £200 million plans to redevelop Castle-Piccadilly after York council gave the go-ahead for the Vangarde Shopping Park at Monks Cross, now home to John Lewis – and tied to the development of York Community Stadium.

The developers said then:

That development is destined to have a major impact on trade in the city centre and, as we have previously stated, that loss of trade – which is likely to be much in excess of £50m-a-year – severely compromises our ability to deliver a viable, comprehensive, high-quality and much-needed development of the Castle Piccadilly site.

That sentiment was echoed in a Retail Study Update for the council by consultants WYG. In September 2014, they wrote:

In relation to Castle Piccadilly… the owners LaSalle UK Ventures Property confirm that comprehensive retail led regeneration is unviable after the decision to approve the Huntington Stadium site in 2012. WYG agree with LaSalle UK Ventures Property that any in centre investment is likely to have been lost in the short to long term…

More recently the York Press revealed the contents of a council-commissioned report which said that

despite the ‘chequered history of failed attempts’ on Castle Piccadilly, the council should see the location as an ‘enormous’ opportunity.

‘Viable redevelopment’

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‘No evidence’ that city centre retailing losing out to out-of-town shops
We asked City of York Council about the Coppergate Centre situation. Here are our questions and the council’s answers.

Is the council helping the administrators to find a new owner for the Coppergate Centre, and if so, how?

City of York Council has been in discussions with the administrators regarding the council’s financial and legal interests and their future intentions for the Coppergate Centre and other properties on Piccadilly in order to encourage a sensitive viable redevelopment of the Castle Piccadilly area.


Has the insolvency of LaSalle had any financial implications for the council, considering it owned the Ryedale Building & more too?

This is the purpose of our discussions with the administrators, to ensure that the legal and financial interests of the council are protected. Consideration is being given to the scope for wider development of the area in all our discussions.


Does this situation confirm that city centre retailing is losing out to out of town shopping?

The council has seen no evidence to support this statement.


Does the fall of LaSalle have implications for the redevelopment of Castle-Piccadilly?

The company that has gone into administration is a ‘Investment Vehicle’ that relates to a number of specific assets. An insolvency situation to any landholding or legal interest in the Castle-Piccadilly area will obviously have some impact on wider redevelopment. We are working with the administrators and other parties to try to secure the long-term redevelopment of the area.

The council was recently selected to join the One Public Estate programme, led by the Cabinet Office and the Government Property Unit, which provides support for local authorities to work jointly with all branches of central government to make the most of all our assets for the creation of jobs and housing. We are currently therefore in discussion with other agencies regarding the comprehensive redevelopment of this important gateway to the city.


YorkMix has also contacted the administrators about their plans for the site, and we are waiting to hear back.

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