Mall to get makeover as property pair snap up Ayr Central for £34m

AYR Central, the West Coast shopping centre developed in 2006, has been bought for £33.8 million by a duo of property investors, including London-based Sovereign Land.

Area Property Partners, a property fund manager headquartered in New York but with offices in London, was also involved in the deal, which reflects a yield of 6.25 per cent.

The purchase price is at a substantial discount to the 75m valuation attached to Ayr Central when developer Henry Boot opened it five years ago.

Fiona Hamilton, partner and head of retail at King Sturge, which advised Sovereign Land and Area Property Partners, said the new owners are already in talks with a number of potential tenants to add to its current tally of 20. The town centre scheme currently houses retailers such as Primark, Debenhams, H&M and Next.

"We've already got quite a few deals lined up on it - there will be a number of physical changes as well as new entrants," Hamilton said.

Chris Geaves, a director at Sovereign Land, said: "We have an asset management plan which will improve the environment of the centre and increase lettable area. There are some obvious gaps in the retail offer and tenant line-up, which our plan will quickly address." Geaves said his firm was after further similar assets.

Commercial property agents in Scotland are hopeful that deals will pick up in the first quarter of this year after 2010 proved to be another lacklustre 12 months. "There are a lot of people out there who still have an appetite for shopping centres," said Hamilton. "There's a reality check coming into the market now as regard to pricing - there are buyers out there at the right price."

At a seminar last week on the outlook for the investment market in 2011, Chris Dougray, head of Lambert Smith Hampton's Edinburgh office, said there is demand for good quality so-called "secondary" office stock.

"At the moment we probably have five active investment deals on the go," he said.

Dougray expects a number of American funds to get involved in the Scottish commercial property market this year. Last month, a New York-based private equity group bought Lloyds Bank Group's 95m loan to Maxim Office Park, the troubled development alongside the M8, for 30m.