US private equity firm Blackstone Group has teamed up with John Milligan’s retail company to invest in UK shopping centres.

The new venture will invest up to £500m on shopping centres which have asset management potential.

Blackstone will put up the majority of the equity while Milligan will be a minority co-investor.

Mark Morgan, director at Milligan who will lead the acquisition programme, said: ‘We will be looking for major shopping centres which will have the ability to dominate their catchment but which may have currently fallen down the hierarchy where we can bring entrepreneurial investments to reposition and regenerate the asset.’

No value in shopping centres since 2002

John Milligan, founder of Milligan, said: ‘Since first working with Blackstone in 2002, we have not seen value in the UK shopping centre market. However, we believe that the coming months will produce some interesting opportunities and we are extremely well positioned with Blackstone to take advantage of these.’

Nick Lyle, a principal at Blackstone, said: ‘We are drawn to Milligan on account of their breadth of experience and depth of understanding in the retail sector, as well as their creative and disciplined approach which fits very much with Blackstone’s own business model.’

Blackstone has invested with Milligan since 2002. The pair bought the Triangle shopping centre in Manchester, which it sold for around £60m in 2005.

Milligan is also working for Blackstone at Center Parcs, developing a strategic business plan in order to maximise income generation for retail, food and beverages.