On Friday, Intu, owner of Metrocentre, failed to agree on payment exemptions with its lenders, plunging into a deep crisis.
He leaves the church, which still owns 10% of the Metrocentre, which could suffer losses and sheds a spotlight on the rest of its commercial properties.
With assets ranging from Gateshead to the Royal Lancaster Hotel in central London and Catford Island Retail Park on the outskirts of the capital, the portfolio is a key part of the Church Commissioners’ £ 8.7 billion investment fund used to pay pensions of the clergy for pre-1998 services and finances mission activities.
The pandemic has taken its toll. The restaurants and cafés of Connaught Village, the luxury retail district of the commissioners hidden north of Hyde Park, have been forced to close; the Royal Lancaster, owned by the Thai businessman Khun Jatuporn Sihanatkathakul, has temporarily closed for the first time in decades; and even the commercial parks have suffered a drop in visitors.
Commissioners have yet to release figures on the pandemic, but other homeowners in central London offer a clear example of what may be in store. Shaftesbury, which owns areas of the West End near Hyde Park, saw its portfolio value drop 7.9% in the six months to the end of March.
“Central London is a challenge,” says Mat Oakley, head of commercial property research at Savills, the real estate agent. “It has a lower percentage of stores classified as” essential “and around a third of retail spending in central London comes from tourism.”
Like other landowners, the Commissioners have negotiated the postponements of rents with tenants, but are aware that pensions must also be paid. In his Hyde Park Estate, home of Connaught Village, commercial and residential tenants were offered a 12-week vacation rental at the beginning of the block.