British Land is close to selling the largest retail park in the £1.5bn Hercules Unit Trust for £170m.
The REIT has agreed a deal to sell the 575,000 sq ft Parkgate shopping park in Rotherham, Yorkshire, to F&C REIT.
The sale follows BL’s decision to purchase £66.8m more units in the trust last year, upping its stake from 49% to 57.2%.
Jefferies head of real estate Mike Prew said: “British Land invested well buying HUT units at a discount, but this only makes sense if HUT’s asset value can be defended.
“Parkgate needs to be weeded out and should have been sold last year in the investment market’s ‘dash for trash’.
“It is a weak asset, being too large at 575,000 sq ft for its catchment area, which is weakening, and it faces strong completion from Meadowhall – so British Land really is competing with itself, and income is probably trending down.”
Parkgate is the largest in a quartet of Hercules assets which BL is close to selling.
A joint venture between Pradera and Tristan Capital Partners is close to securing a deal to snap up two of the smaller assets, Hatter’s Way retail park in Luton, Bedfordshire, and the Hylton Riverside retail park in Sunderland, Tyne and Wear, valued at £20m and £26m respectively.
A fourth park, Crown Wharf in Walsall, West Midlands, is still on the market.
The assets were originally offered via CBRE as a £300m portfolio known as Project Orange. But in April Cushman & Wakefield was also instructed to market the three smaller assets on an individual basis.
