Savills Investment Management’s UK Value Boxes Fund has deployed £75m in its first four retail park acquisitions.
The four retail parks – two in England, one in Scotland and one in Wales – were acquired for a combined yield of nearly 7.5%.
Average passing rent on the four assets is £13.50 per sq ft. The average unexpired lease term is around seven years.
The fund, which focuses on parks let to grocery, discount and DIY retailers let on low rents, launched in October last year.
The two retail parks in England are located in Stafford and Catterick. Hough Retail Park is located less than a mile from Stafford town centre, and is the primary bulky goods retail warehousing park in the area. Measuring 101,799 sq ft and providing 415 customer car parking spaces, the park’s tenants include B&Q, Argos, Home Bargains and Starbucks.
Princes Gate in Catterick Garrison is the dominant retail and leisure provision in the area. Its tenants include Iceland, Poundland, Pets at Home, Sports Direct, Next and Boots.
The fund also bought Avenue Retail Park in Cardiff, which is anchored by an M&S Foodhall, B&M and Home Bargains, and a retail park in Aberdeen let to Aldi, Matalan, B&M and Argos.
Harry de Ferry Foster, head of UK, fund director at Savills IM, highlighted the “competitive nature of the buyers’ market”.
“These acquisitions will provide a strong yield profile to our investors and exposure to a variety of household names as tenants off very low rents,” he said.
“The UK retail parks sector continues to demonstrate resilience to e-commerce trends given the high proportion of daily necessity and value-oriented items, and we look forward to making further purchases in the future to ensure the fund is fully invested.”
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