K
ames Capital is paying a prime high street yield for a parade of short-let shops in Chelmsford, Essex.
The investor has bid £8.6m – a 4.7% yield – for the four shops, let to AC Cards, Candy Cards, Carphone Warehouse and Claire’s Accessories. All four tenants have five years remaining on their leases.
The yield is more in line with the benchmark prime high street yield of 4.25%, than the 7+% expected in more secondary locations.
However, increasing competition in the retail investment market, particularly in the shopping centre arena, has led investors to look more aggressively at the high street.
According to the latest retail report from Savills, the high street retail investment sector is generally experiencing a widespread re-rating of risk, with factors that were seen as risky 18 months ago now being viewed in the context of their longer-term averages.
The report said that investors were becoming more relaxed about covenant strength, particularly in the light of the rising number of new retailers entering the market, and voids, with some buyers starting to see them as an opportunity rather than a risk.
JLL is selling the Chelmsford properties on behalf of M&G’s Prudential staff pensions scheme for £7.6m.
