Two prime out-of-town retail parks in the South East look set to be sold at yields of around 4%.
British Land and the Church Commissioners are fighting over the 29,800 sq ft (2,800m2) Mothercare World, Croydon, both offering £23m, an initial yield of below 4%.
The scheme, put up for sale by clients of CBRE Investors at £20.5m, has an outstanding rent review from September. If the rent increases from £29 per sq ft to about £31.50 per sq ft as expected, it would reflect a 4.5% yield.
Commercial Estates Group’s 24,250 sq ft (2,250m2) Waitrose store and 20-shop parade in Cobham, Surrey, has gone under offer at a 4.25% initial yield. The store, put on the market through Lewis Ellis with an asking price of £24m, is about to be sold for £29m to a private individual.
Marcus Wood, investment director at DTZ, said: “There have been yield shifts and that is down to the sheer weight of money chasing limited stock. It’s not because there has been an improvement in retail or rental growth prospects.”
References: EGi News 08/04/05
