Consolidated Property Group is selling a portfolio of three retail parks for £170m – a 6% yield.
It is one of the largest retail portfolio opportunities to be marketed this year, which has seen a dip in investment volumes as investors remain cautious owing to the uncertainty surrounding the current political and retail landscape.
Savills has been instructed to market the opportunity.
The assets include the 137,400 sq ft Malvern Shopping Park, Worcester; the 150,000 sq ft Chester Retail Park in Chester; and the 114,084 sq ft Eastgate Retail Park in Bristol.
Tenants across the portfolio include Pets at Home, Halfords, Marks & Spencer and Boots.
The decision to sell comes as CPG looks to refocus its portfolio towards development sites. The business is led by founder and chairman Stuart Dawson, a former partner at Dunlop Heywood. It has several development projects in the pipeline, including Handforth Dean Shopping Park, which has already secured a 66,000 sq ft Next as its main tenant. Planning for five restaurants at the park is to be submitted imminently.
The company will reinvest the cash raised from the sale of these three parks into its development pipeline.
Despite the retail investment market experiencing a slowdown, of the £824m that has been invested into retail this year, £263m has been invested into retail parks and £374m has been invested into shopping centres.
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Comment: retail parks keep the sector going
James Child, retail research manager, EG
Retail parks have powered retail investment over the past 12 months.
Pre- and post-Brexit trepidation helped to slow the rate of investment in the retail sector. The first and second quarters 2016 were fraught with landlord and investor tension, as uncertainty hit supply.
The vote in favour of Brexit did little to persuade the parties to recommence trading and the slowdown lingered into the later stages of last year and well into the beginning of 2017.
Retail park investment has, however, remained robust, increasing its percentage share of the overall volume quarter on quarter. Retail park volume rose from 10% at the start of last year to almost 25% in Q2 2017.
Retail parks are becoming an increasingly attractive opportunity for investors, as vacancy rates in these schemes continue to fall. The sector’s development pipeline suggests that taking advantage of constrained price points may be advantageous to investors hedging their bets in an evolving market.
Retail park consumer confidence and sales volumes are up, as well as footfall, after a blip late last year, and many observers suggest that the advent of click and collect and its suitability to retail parks is driving investment in the sector.
Low rents and larger floorplates means that tenants are continuing to move to retail parks – another reason that he sector should see increased investment activity.
