DTZ Investors has closed a deal to buy Purley Cross Retail Park in Croydon, south London, from Oval Real Estate for £59m.
The prime retail park has 126,410 sq ft of lettable floorspace across five stores, on an 8.6-acre site.
The scheme is fully let with a WAULT of 11.9 years to break and 12 years to expiry, producing a net rent of more than £3.4m per annum from the occupational leases. Further income is generated from existing PV and EV infrastructure at the site, and there is a 61% income exposure to indexed rent reviews.
Tenants include Aldi, Marks & Spencer, Smyths Toys, Currys and Starbucks. Three-quarters of the asset’s lettable area is either new or newly refurbished, underpinned by a multi-million-pound works package at M&S, linked to the letting.
The Aldi, Smyths Toys and Starbucks block was developed in 2021, and the Currys store was substantially refurbished around 2010.
Ben Haller, director at DTZ, said the retail park had “strong fundamentals”. “The occupational dynamics in Croydon, in tandem with the WAULT and tenant profile, offers resilient income with prospects for growth,” he added.
“The underlying location gives flexibility for alternative land uses over the long term, while the quality of physical real estate immediately strengthens the fund’s responsible investment objectives.”
Joe Wall, director at HampsonWall, which advised DTZ on the deal, said: “We are beginning to see a resurgence in institutional demand for the prime retail warehouse assets over the past few months, which DTZ Investors has spearheaded with this acquisition.
“This sort of asset is rarely available and offers defensive income in a core location to counteract current market risks. Positively, the UK’s economic outlook may not be as severe as some predicted at the tail end of last year and we expect to see a busy 2023 as conditions stabilise and investors actively pursue opportunities to deploy capital.”
Green & Partners and DTRE acted jointly for the vendor.
To send feedback, e-mail pui-guan.man@eg.co.uk or tweet @PuiGuanM or @EGPropertyNews
