Onward
Selfridges Sees £600m Value Decline Due to Loan Challenges
According to financial disclosures from the property holding company of the luxury retailer, Selfridges’ real estate assets experienced a reduction exceeding half a billion pounds in the previous year.
Financial reports show that assessors have lowered the valuation of Selfridges’ £3.1 billion property portfolio—including its prominent store on Oxford Street in London—by £638.6 million, a decrease of 20.6%.
The retailer currently carries over £1.7 billion in loans, which are due to mature in August 2025 and are secured against its freehold properties, as noted by The Sunday Times.
Recently, Saudi Arabia’s Public Investment Fund (PIF) acquired a 40% stake in Selfridges Group, which includes the British department store chain, as well as the De Bijenkorf stores in the Netherlands and Brown Thomas and Arnotts in Ireland.
In 2021, the Weston family sold Selfridges Group to the real estate firm Signa Holding and the Thai conglomerate Central Group for £4 billion, integrating it into their collective luxury department store portfolio.
The latest agreement with PIF follows challenges faced by Signa last year, resulting in considerable financial vulnerabilities stemming from rising interest rates. This led to a renewed auction for Signa’s stake in Selfridges.
Selfridges has not released any financial specifics regarding the recent PIF transaction.
In light of Signa’s downturn, Central granted Selfridges a £98.1 million loan this year to meet financial obligations previously established by the co-owners. As part of the recent deal, both Central and PIF have provided undisclosed amounts to Selfridges.
Selfridges operates through two separate corporate structures: one overseeing its property holdings and another managing its operational functions. Financial records for the operational division are still awaiting submission.
The diminished property portfolio comprises the flagship Oxford Street store, an adjacent building, and the Selfridges outlet located in Manchester’s Exchange Square.
A spokesperson for the retailer informed The Sunday Times that the write-downs were primarily due to “external market factors,” including interest rates and prevailing market rents.
Image Source: Selfridges.com