The value of Selfridges’ property assets has dramatically fallen, signalling financial challenges ahead.
- The reported decrease in property value amounts to over £600 million, representing a significant decline.
- A substantial portion of loans, totalling over £1.7 billion, are secured against these devalued assets.
- The recent acquisition by Saudi Arabia’s Public Investment Fund injects complexity into Selfridges’ financial landscape.
- The instability of previous co-owner Signa Holding has contributed to current financial pressures.
The value of Selfridges’ property portfolio has plummeted by £638.6 million, as reported by their property holding company. This 20.6% drop reduces the assets from £3.1 billion, highlighting substantial devaluation. Such assets include the flagship store on Oxford Street, London, which is pivotal to the brand’s image.
Concerns mount as over £1.7 billion in loans, due in August 2025, are tied to these now devalued properties. This increase in financial pressure aligns with a global rise in interest rates and fluctuating market rents.
The strategic move by Saudi Arabia’s Public Investment Fund (PIF) to acquire a 40% stake in Selfridges introduces a new dynamic into the mix. This acquisition impacts the ownership structure, alongside other stores such as De Bijenkorf and Arnotts.
Previously, Selfridges was part of a £4 billion sale to Signa Holding and Central Group back in 2021. However, the financial collapse of Signa Holding last year due to rising interest rates forced Central Group to inject £98.1 million into Selfridges to cover outstanding financial commitments.
Both Central Group and PIF have recently made undisclosed financial investments into Selfridges as part of their ownership responsibilities. The department store group is divided into entities managing property assets and its operational business, though only the former’s accounts have been disclosed. The writedowns are attributed to external market pressures as noted by a company spokesperson.
The financial challenges facing Selfridges are underscored by the significant devaluation of its property assets amidst looming loan obligations.
