The owners of a huge shopping centre in Wales have finally been revealed after months of mystery. Questions have been raised in recent months over a lack of answers about who owns Friars Walk shopping centre in Newport.
The shopping centre, which opened to much fanfare in 2015 at a cost of around £100m, was bought by a Canadian company called Talisker Corporation from original owners Queensberry Real Estate in 2017. It has since seen a number of high-profile departures including its flagship Debenhams store, while its Cineworld has remained shut since the pandemic.
But a WalesOnline investigation last summer raised questions after it revealed the centre had been “transferred to a new company”. At the time Newport City Council, which has spent £3m subsidising lost rent from empty shops, confirmed ownership had transferred from Talisker but refused to say to whom. You can read that story here.
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Since then the ultimate owners of the shopping centre have remained shrouded in mystery and repeated requests to Newport City Council for this information have yielded no answers – until this month. This is slightly complicated, but here’s what has happened. For the latest Newport news, sign up to our newsletter here
A simple question with no answer
Our initial investigation in July 2023 led Welsh Conservative Shadow Economy Minister Paul Davies MS to say there was a “troubling lack of transparency” around the matter and called on the Welsh Government and Newport City Council to clarify Friars Walk’s ownership. Matthew Evans, leader of the Newport Conservatives, also asked Newport City Council leader Jane Mudd a written question about “secrecy” around naming Friars Walk’s new funding partners.
These questions are supposed to receive a response within ten working days. However, the council leader responded in late November – an entire three months later – to say there was “no secrecy in relation to the ownership of Friars Walk” and that “these details are in the public domain and can be obtained from the Land Registry”.
Councillor Mudd added that there has been “no change in the ownership of Friars Walk since 2019” and said the position remains as follows: “The freehold is owned by Newport City Council; The headlease is owned by Friars Walk LH Limited. The sub-lease is held jointly by ANW TDS (Nominee 1) Limited and ANW TDS (Nominee 2) Limited and has been since it was assigned in April 2019.”
In early August WalesOnline made a Freedom of Information request to Newport City Council requesting details of council correspondence around Friars Walk’s ownership or any information relating to the transfer of the shopping centre’s holding company Friars Walk LH Limited. FOI requests are supposed to be answered within 20 working days but this did not happen. After months of delays, I complained about the council to the Information Commissioner’s Office, which asked the council to issue a response.
The council provided that response in mid-December – four and a half months after I sent the request and nearly four months after that 20-day deadline. That response revealed that Friars Walk LH Limited was acquired by new funding partners in early 2022 and that Newport City Council was involved in those discussions.
The documents showed email exchanges around arranging dates for calls between the new funding partners, discussions over day-to-day management of the shopping centre and details of the council’s agreement to subsidise lost rent from empty shops. Information previously obtained by WalesOnline in 2022 showed the council had paid £1 million over two years – the maximum allowed via its subsidy agreement during that period – to the private owners of Friars Walk to cover lost rent. You can read more about that here.
However, all details of who the funding partners are were redacted from the council’s FOI response. The council said this was due to the “need to ensure that the commercial interests of third parties are not prejudiced or undermined by disclosure of information which is not common knowledge.”
“The disclosure of information relating to the financial or commercial performance could likely affect future business dealings along with the reputation of the parties concerned,” it said. “This in turn could affect future performance of Friars Walk.”
What was even stranger was that when I contacted the council’s press office, it issued a statement to say: “The council is regularly contacted by private companies in the city but we would be unable to disclose details of those conversations for reasons of confidentiality. As said previously, Friars Walk LH remains the owner of the retail and leisure centre. It would not be appropriate for the council to reveal details of the funding partners without their consent, which has not been given.”
Why would a company not consent to its details, or even its identity, being disclosed as part of a project which was once seen as key in Newport’s development? This made little sense to me. There seemed to be no way you could argue that simply disclosing your identity would impact your future performance. We aren’t talking about intimate details of business dealings – we were simply asking who they were.
On this basis, I asked the council to carry out an internal review of their FOI response. This is supposed to be done within ten days but, once again, this did not happen. Then, on January 9, the council issued its response which included emails between Friars Walk’s management and Newport City Council which gave the name of the funding partners as Cyrus Capital Partners Europe LLP.
This came as something of a surprise. Here I was, six months on from when I first started asking a simple question which nobody seemed willing to answer, and now it was sitting in front of me.
Needless to say, I knew nothing about Cyrus Capital Partners Europe LLP whatsoever, so I did some digging. The company is an investment adviser with offices in New York and London whose website says it invests “on a global basis in securities and loans issued by corporates and sovereigns”. It manages and invests funds on behalf of investors, examples of which can include the likes of pension funds, endowments and other organisations.
If your eyes glazed over reading just that much, don’t worry. Mine did too. But further research it threw up information showing a company with a long history in investing on struggling companies. Support award-winning journalism with WalesOnline’s Premium app on Apple or Android
Who are Cyrus Capital?
Cyrus Capital is a hedge fund company with offices in London and New York which was set up in 1999 by Stephen Freidheim, an investment advisor who has been on the board of the influential New York think tank the Council on Foreign Relations and a member of the university council at Yale.
Since then it has grown a reputation for investing in distressed and stressed companies and assets – essentially, those which are facing financial difficulties or who are at risk of bankruptcy or insolvency. Cyrus Capital’s European arm is run by Lucien Farrell, a businessman and Old Etonian who has a long history in investing in struggling companies.
Farrell, who the FT previously reported has an office in the high-end Mayfair area of London, has been involved in Cyrus since 2004. The FT has reported at length about Cyrus Capital and Mr Farrell, quoting sworn testimony from a 2016 court case in which he said: “I have been involved in investments in over 100 companies, the majority of which would be considered stressed or distressed companies.”
Cyrus Capital’s most high-profile venture in recent years was its involvement in regional airline Flybe. In 2019 Cyrus Capital became a minority shareholder in Flybe when it joined with Virgin Atlantic and Stobart Air to acquire the airline for £2.2m, or around 1p per share. That cut-price deal was thrashed out in the midst of the airline’s well-publicised financial struggles amid warnings that it was close to being wound up.
In early 2020 Flybe collapsed into administration, putting over 2,000 jobs at risk. In 2021 Flybe’s assets were bought by a new company called Thyme Opco Ltd, which was affiliated with Cyrus Capital.
The company pledged to resurrect the airline and flights resumed in 2022 with a base in Birmingham Airport. However, in early 2023 Flybe entered administration for a second time, with the airline confirming it had ceased trading with immediate effect and that all flights had been cancelled. Hundreds of staff were made redundant.
Cyrus Capital has been linked with other struggling businesses too. The British restaurant chain PizzaExpress has been overseen since 2020 by a group of funds including Cyrus Capital and another US fund Bain Capital, with the chain under the strain of a £1.1bn net debt in 2018 and forced to shut dozens of restaurants in the UK and Ireland, resulting in hundreds of job losses.
While some of the companies it has taken on have clearly been struggling, Cyrus Capital itself doesn’t appear to be. According to Cyrus Capital Partners Europe LLP’s most recent accounts filed in 2022, the company had a turnover of £4.5m, down from £7.9m in 2021, and an operating profit of £1.3m in 2022, down from £5.1m the previous year.
It is important to say here that Newport City Council is not paying its annual rent subsidy to cover empty shops to Cyrus. Until 2022 it was paying that to Talisker, the company that previously owned Friars Walk, but this is now being paid to a company called Old Star Finance. In July, I looked into Old Star Finance and found there was little publicly available about them. Of the active companies on Companies House the only one I could find was an Old Star (Commercial) Limited based in London and listed as ‘buying and selling of own real estate’. A wider Google search found few international results other than an Old Star Finance Limited based in Jersey. It still isn’t clear who Old Star are, but the council says they own the rights to the subsidy but are not the owners of Friars Walk.
Why does this matter?
There are many outstanding questions here. While we now know who the investors at the helm of Friars Walk are, we still don’t know why it has taken six months to find this out, or why we have had to go through numerous requests to the press office, a Freedom of Information request, the Information Commissioner’s Office and numerous delays just to get it. We also don’t know anything about the terms under which the transfer of ownership from Talisker happened.
It isn’t a question of public money being unaccounted for. Nobody has ever suggested anything untoward was going on, and we know the council is paying its subsidy to Old Star Finance (albeit us having little info on who they are). But when Talisker bought Friars Walk in 2017 the news was paraded as a story of success for the company and for Newport itself. Only a few years on, why wouldn’t someone want to boast about being involved in a project that is presumably worth a lot of money? And why shouldn’t people who live in a city and whose money is spent in the shopping centre know who actually runs it?
What does all this mean? Well, the simple – and frustrating answer – is that we still don’t really know. Was Friars Walk struggling in 2022 before it was acquired by Cyrus Capital, a company well known for investing in financially struggling businesses? What were the terms of any sale or change of ownership? WalesOnline has asked Cyrus Capital for comment on the terms of its investment in Friars Walk LH Limited but it has not provided a response.
Newport City Council has said on the record that consent was not given by Cyrus Capital to disclose details of its involvement in Friars Walk. WalesOnline has asked Cyrus Capital why this was the case but has not received a response.
There is no suggestion that Friars Walk is or has been failing, but its struggles have been well documented. It has been nearly three years since its flagship store Debenhams closed for good in mid-2021, and still no permanent solution has been found other than Aneurin Bevan University Health Board using it as a vaccination centre.
Cineworld – Newport city centre’s only cinema – also has not reopened since the pandemic. There have been a number of other high profile departures in the past few years including Topshop, Schuh and The Body Shop while more recently newer stores and restaurants like Smokd and Damaged Society have come and gone within a short period. Karen’s Diner, the infamous restaurant chain known for its “rude” service, opened and closed within the space of a few months last year.
Across the road, Newport’s other shopping centre, the Kingsway Centre, went into receivership last year before being sold for nearly £400,000 below its guide price. Its new owner later told WalesOnline of his major plans to transform the struggling shopping centre and you can read more about that here.
Matthew Evans, leader of the Newport Conservatives, said the latest revelations left questions to be answered about why this information has taken so long to come to light. “It raises more questions than answers,” he said. “Why have they been unwilling and why has it taken an FOI and the Information Commissioner for this to come out?
“Surely this should be in the public domain? Clearly there are questions which remain unanswered and residents of Newport deserve to know what’s happening. Are there any financial troubles?
“Those questions are valid and should be answered. Friars Walk is a significant development in the city centre and we want to ensure its long term viability. The council are still paying out this money every year via the subsidy agreement which makes it even more important that these questions are answered.”
A Cyrus Capital spokesperson said: “As with many shopping centres around the country, Friars Walk suffered enormously through the Covid pandemic. Since coming on board early in 2022, our aims have been to support the centre’s recovery, increase occupancy, and for the centre to be an important part of Newport city centre life.
“There are many things that go into this, and a lot of effort is being made across the board, but clearly replacing Debenhams and having a cinema running again are really important focus areas for the centre. No investment subsidy is paid to Friars Walk, Cyrus, or any other company connected with them.”
A Newport City Council spokesperson said: “Newport City Council officers hold regular meetings with the owners and operators of Friars Walk to discuss opportunities and challenges. Potential tenants are directed to Friars Walk and the company is aware of our City of Newport business grants programme which offers support to new and expanding businesses in the city centre and across Newport.
“Eligible businesses can also apply for a reduction in business rates. We also work with Friars Walk on the programming and delivery of city centre events and they use the council’s What’s On portal to promote their own events.”