Investment manager Orchard Street IM has acquired a retail park in the central UK city of Derby for £57.3 mln (€67.8 mln), reflecting a net initial yield of 5.75%.
Kingsway Retail Park was acquired on behalf of St James's Place Property Unit Trust from TH Real Estate. The open-air scheme dates from 1995 and is the prime and dominant retail park in Derby, comprising 13,820 m2 of space. It is fully let to 16 retailers, including Next, TK Maxx and Marks & Spencer, and a weighed average unexpired lease term (WAULT) of 6.25 years. The scheme has a car park for 513 vehicles.
Commenting on the deal, Barney Rowe, partner at Orchard Street, said: 'Kingsway Retail Park is an excellent addition to our portfolio, demonstrating exceptionally strong trading performance in addition to resilient occupier demand. As the dominant retail park in the wider area, it benefits from a diverse range of high-quality tenants attracting a high level of footfall, whilst it also offers the longer term potential to undertake asset management initiatives to enhance future growth.'
Mark Cruddas at TH Real Estate said: 'The sale of Derby concludes the capital recycling initiative that commenced in Q4 2015 with the purchase of Borehamwood Shopping Park. Having completed the extensive business plan the Retail Warehouse Fund is able to crystallise its profit with the asset producing 9.4% pa total return over the hold period against the benchmark of 6.6%.’
Orchard Street was advised by Savills, while Morgan Williams acted for the vendor.
