A BIT OF SCOTCH
Jan 1, 2005 12:00 PM
The Mills Corp. continued its aggressive international push through the joint venture acquisition of the 715,000-square-foot Enoch Centre (pictured right) in Glasgow, Scotland. Mills is teaming with Ivanhoe Cambridge (with whom it constructed the recently-opened Vaughan Mills outside Toronto) on the $524.2 million deal.
Mills' previous international forays include Madrid Xanadú in Spain, Vaughan Mills and a planned project in central Rome.
The Scottish center was purchased from German pension fund Deka Immobilien Investment. Morgan Stanley REIT analyst Matthew Ostrower said in a report the deal appears consistent with pricing for U.S. assets, though it presents risks.
Mills anticipates first-year net operating income of $32.2 million, a bit low considering the price, Ostrower said. An unfavorable rise in interest rates or exchange rates between the dollar and the British pound could wipe out some of the upside Mills sees in the deal through retenanting the center and filling vacancies.
St. Enoch Centre has an estimated 20 million visitors a year sales between $1,400 and $1,700 a square foot.
