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Canadian pension fund takes control of Manchester's Trafford Centre

Tom Shearsmith
16 December 2020

Canada Pension Plan Investment Board (CPP Investments), headquartered in Toronto, has acquired ownership of the Manchester Trafford Centre after failing to find an alternative buyer.

The shopping centre, which attracts about 30 million visitors a year, went up for sale in August after owner Intu entered administration in June.

In 2017, CPPIB Credit provided a £250 million facility to Intu Trafford Centre Group (UK) Limited (ITCG), a subsidiary of intu, and the indirect owner of the Trafford Centre, which was secured by the equity interest in the Trafford Centre.

As the principal secured creditor of ITCG with security over the equity interest in the Trafford Centre, in the absence of alternative sources of funding and the unsuccessful sale process, CPPIB Credit has exercised its rights to acquire the shares in ITCG and the ownership of the Trafford Centre.

Geoff Souter, Managing Director, Head of Real Assets Credit, CPPIB Credit said: “The Trafford Centre is one of the U.K.’s top five shopping centres, welcoming more than 30 million shoppers annually, and counts many leading global retailers among its occupiers.

While conditions for retail in 2020 have been very challenging, we are able to take a long-term view and believe that, with strategic management and investment, the Trafford Centre has strong prospects. An immediate priority is to support the Trafford Centre’s management, ensuring continued optimal operation of the Trafford Centre, and to appoint a long-term expert operating partner.”

CPPIB Credit will also evaluate the Trafford Centre’s complex capital structure to ensure it supports the return to long-term viability.

CPP Investments is a well-established investor in UK shopping centres with specialist experience of owning large scale retail assets. It has a strong track record in U.K. retail with investments in London’s Westfield Stratford, Birmingham’s Bullring and Grand Central.

Since entering administration in June 2020, Intu Derby, Intu Milton Keynes, Intu Potteries, Intu Watford and Intu Victoria Centre are among those that have been sold or transferred to new management.

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