Bredero revives schemes

BREDERO Properties, which yesterday sold the Paisley Centre in Glasgow to Legal & General for pounds 38.4m, plans to develop the second phase of its Centre West development in Hammersmith and to start work on a second shopping centre in Glasgow next year.

The decision to progress with the two schemes is a vote of confidence in the improving fortunes of the property market, from a company that was caught out by the property slump, crashing to a pounds 106m loss in 1992.

Peter Badcock, finance director, said the disposal of the Paisley shopping centre, a 180,000 sq ft development that was only completed two years ago, had reduced borrowings to less than pounds 10m.

He said that the centre was trading well but had been sold to take advantage of the strong property investment market and as part of Bredero's policy of reducing its debts.

The deal represents an exit yield of about 7 per cent and covers the book value of the site in Bredero's accounts.

Mr Badcock said the decision to press on with the 220,000 sq ft second phase of the Centre West development reflected the dwindling amount of Grade A office space in central London. It had not been decided whether to go ahead with the scheme alone or in joint venture with an investing institution. A pounds 77m write-down of the value of the first part of Centre West played a large part in Bredero's 1992 plunge to negative net assets of pounds 24m. A refinancing last September in effect transferred control of the scheme to Hypo Bank.

Four-fifths of the retail element of the development is now let, while almost half of the offices are being rented by Coca-Cola, as its European headquarters, and Systems Union, the computer company.

The second development in Glasgow, the Buchanan Centre, will provide a further 550,000 sq ft of retail space in the city. John Lewis is to take about half of the scheme.

Bredero's shares closed 4p higher at 22p.