M&G Real Estate is under offer to buy the Bridgend Designer Outlet in south Wales from TH Real Estate for around £115m – a 6% yield.
It is the first time that the fund manager, attracted by rising sales, has invested in the designer outlet sector in the UK.
Developer McArthurGlen, which manages Bridgend as well as five other UK outlet malls, reported a sales growth of 20% in its last set of annual results. In the results it said that the Bridgend scheme was one of its best-performing assets, reporting a 12% year-on-year increase in sales.
Outlet mall tenants usually pay the leaseholder a percentage of the turnover, which reduces the risk of over-renting and makes the malls an attractive opportunity for some shopping centre investors.
TH Real Estate bought the 250,000 sq ft outlet centre in 2008 from McArthurGlen in a £365m deal, along with two other malls, for its TH Real Estate UK Outlet Mall Fund.
LaSalle Investment Management and Hermes also have a trio of outlet malls on the market for £107.5m through CBRE.
Cushman & Wakefield advised TH Real Estate.
