FESTIVAL Place, the largest shopping centre in Basingstoke, has been placed in receivership, it has been revealed.

The shopping centre, which includes traders like H&M, M&S and Next and underwent a refurbishment in 2017, has seen a number of high-profile chains such as Debenhams, Zara and Pizza Hut depart in recent years and currently has a number of vacant units. 

On May 12, 2023, the shopping centre was put into receivership and BDO LLP, an accountancy and business advisory firm, has been appointed to help assist with the matter. 

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'Business as usual'

Despite these changes, Festival Place's management has assured visitors, tenants, and staff that it's "business as usual" within the shopping centre.

Festival Place centre director, Neil Churchill, said: “It’s very much business as usual at Festival Place. There have been some behind-the-scenes changes in financing arrangements which have no effect on the day-to-day running of the centre.

“Like many large retail assets, Festival Place is financed with commercial bank funding and managed by a third-party asset manager. Earlier this year in May, Sovereign Centros was appointed as the new asset manager and has assumed responsibility for the overall strategy and management of Festival Place, alongside receiver – Kiri Holland of BDO – who was appointed on the same date.

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“There are no day-to-day implications for occupiers, staff or visitors at Festival Place, which continues to be run by the existing management team and the centre continues to operate successfully in accordance with its status as a UK top 25 shopping destination, as it has done since these operational changes over four months ago.”

In 2015, AEW Europe, a capital management firm, acquired Festival Place, in partnership with Teacher Retirement System of Texas for £290m.

Council's concerns

Basingstoke and Deane Borough Council, which holds the property's freehold and receives nearly £0.5 million in annual rent from Festival Place, is closely monitoring the situation.

A council spokesperson said: “The council is the freehold owner of the land that Festival Place stands on. The owners of Festival Place have a long lease on the property that has over 200 years left on it.

“We are in contact with the owners of Festival Place to understand their future plans for the centre and how that contributes to the success and vitality of the town centre.”

Council leader Cllr Paul Harvey said: “We know how important the success of Festival Place is to the town centre. We are keen to see it in the right ownership for the future that will strengthen its position as a key partner in Basingstoke. We will continue to talk to the Festival Place management. As a Cabinet, we are committed to exploring the rejuvenation of town centre of which Festival Place is a vital part.”

Former council leader Cllr Simon Minas-Bound said: "The news of Festival Place going into receivership is concerning.

"Given its importance to Basingstoke's town centre, I urge the current council administration to provide immediate support to Festival Place and its tenants. It's crucial to seek a long-term solution, clearly now involving a new owner capable of making necessary investments for the future."

Shoppers share their thoughts

Festival Place shoppers reacted with shock to the news that the shopping centre has been placed under receivership.

Wayne Stent said the high business rates could be a reason why more and more shops are leaving Festival Place.

"I have spoken to a few shops here. They said the mall management is shooting itself in the foot with their rent. So many shops have left the mall in the past three years, which is a real shame," he said.

Steve, who didn't want his last name shared, said big shops are leaving shopping centres like Festival Place and going out of town.

He added: "People nowadays would rather shop in a big shop outside the town or online than visit a big mall. If you look at shops here, I can't find any butchers or DIYs. They are all gone. What's the point of coming here then?" 

Receivership: What does it mean?

Receivership is a court-appointed or bank-appointed process intended to aid creditors in recovering funds from a debtor in default.

It also serves as a lifeline for struggling companies, helping them avoid bankruptcy.

It facilitates the lender's ability to reclaim the owed funds when a borrower defaults on a loan.

Receiverships may also be implemented as part of a company's restructuring efforts aimed at restoring profitability.

Receiverships can also be triggered by shareholder disputes.