Quadrant Estates and KKR are selling the 230,000 sq ft Gallagher Retail Park at junction 9 of the M6, near Birmingham, for £180m – a 5.2% yield.
According to EG data, JLL and Wilkinson Williams have been appointed to market the asset. It is the largest retail park investment opportunity to be put up for sale in the past five years.
Quadrant Estates and KKR acquired the property in three phases between September and December 2014 for a combined price of around £125m.
The joint venture partners have since spent around £17m investing and developing the park.
Works have included the addition of 33,000 sq ft of shops and reconfiguring 49,000 sq ft, adding three new restaurants. amalgamating the car parks and improving the public realm. These works added an additional £2m pa in rent, bringing the asset’s overall rent roll to £9.5m.
Currys, PC World, M&S Simply Food, Tapi Carpets, Oak Furnitureland, Sofology, Nando’s, Costa Coffee, Mod Pizza and Smashburger all signed as new tenants under Quadrant and KKR’s ownership.
The unexpired average lease term on the retail park is now over 10 years, and existing tenant Next has recently secured a deal with the owners to extend its lease at the park for a further 10 years.
JLL and Wilkinson Williams have been instructed to market the opportunity.
The second-largest transaction of this scale was Stadium Development’s sale of the Parc Trostre Retail Park, in Camarthenshire, Wales, to M&G Real Estate in 2014 for £156m – a 5% yield.
Last year, £1.7bn was invested into the retail park sector, falling slightly short of the record level of investment over the past five years, which was 2015 when £1.8bn traded.
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