British Land has signed a £90m forward funding agreement with Stanhope for the development of the Old Market retail and leisure development in Hereford.
The deal is the first forward funding for a retail development to have been completed in the past five years, and represents a yield on cost of between 6.75 and 7%.
The 310,000 sq ft open-air scheme includes 22 shops, a six-screen cinema and seven restaurants.
Richard Wise, BL’s head of retail development, said: “We believe retail development adds significant incremental value and are replenishing our pipeline to build growth and opportunity by assembling an exceptional, diversified portfolio of dominant assets. We are one of a very small group that has the ability, experience, financial strength and scale and strategy to capitalise on future demand for the right space.”
BL is one of the UK’s largest REITs with a total of £15.5bn under management as of a March 2012 valuation. Retail accounts for 61% of the company’s portfolio.
sophia.furber@estatesgazette.com
