L&G Property buys two retail investments

The assets, which comprise The Blenheim Centre in Hounslow and Castle Place Shopping Centre and St Stephen’s Place in Trowbridge, were acquired for £35.5 million and £7.8 million respectively, representing net initial yields of 5.6% and 10.8% respectively.

The acquisitions are consistent with LGP’s strategy to capitalise on opportunities using its specialist in-house retail development skills, which was further enhanced in 2009 by the appointment of Simon Russian.

Blenheim Centre, Hounslow:

On behalf of its Linked Pensions Fund, LGP has acquired the freehold interest in Blenheim Centre in Hounslow from a subsidiary of AREA Property Partners (formerly Apollo Real Estate Advisors) in an off-market transaction.

The property is anchored by a 77,000 sq ft edge of town Asda superstore and includes long term development potential to partner the Council on Phase II of the town centre’s redevelopment programme.

The total property comprises 129,512 sq ft of retail, leisure healthcare and restaurant accommodation over the ground and first floor, together with a 409 space car park in the basement. On the upper levels there are 484 apartments over 221,816 sq ft, all of which have been sold, by way of a long lease, to a subsidiary of Barratt Homes.

The Asda is the dominant foodstore with a strong catchment and a passing rent of £14 per sq ft, which reflects a low like for like rent for a store of this nature, age and fit.  Underpinning its rental value, it includes a fixed increase in 2011 at 3.5% per annum and a minimum fixed uplift in 2016 to the higher open market rental value or 3.5% per annum.

Other occupiers include Dreams Plc, The Gym Limited, Funky Monkey and the Primary Care Trust.

Castle Place Shopping Centre and St Stephen’s Place development site, Trowbridge, Wiltshire:

On behalf of the UK Property Trust, LGP has acquired the freehold interest in Castle Place Shopping Centre and St. Stephen’s Place development site from GVA Grimley acting as receivers for Thiyan Investments Limited.

Castle Place Shopping Centre, built during the 1970s, comprises a fully covered shopping and leisure centre, market hall and office space totaling approximately 72,500 sq ft NIA, arranged over the lower ground, ground and first floors.

The scheme comprises a mix of national multiple and local retailers, including Greggs, JD Wetherspoon and Martin the Newsagents, and is anchored by a 27,500 sq ft Wilkinson store.  Wiltshire Council occupies the leisure centre on the first floor and there is a multi-storey car park to the rear.

The St Stephen’s Place development site is situated immediately to the south of the Castle Place Park and Shopping Centre.  The property comprises a 1.24 hectares (3.06 acres) brownfield development site which, previously occupied by a Tesco foodstore, is cleared for future construction works.

Gordon Aitchison, LGP’s Head of Transactions, comments:

“In line with our acquisitions strategy, these two purchases reflect our ability to capitalise on our in-house expertise and selectively take advantage of market conditions and the rare opportunities that are now unfolding.

"These purchases demonstrate LGP’s ability to move fast in identifying and seizing attractively priced assets that are characterised by offering solid income streams coupled with opportunities for significant future value uplift.

“With substantial firepower of cash to invest on behalf of our clients and a team of innovative, well-connected, talented individuals, we believe that we are well positioned to continue to actively source a wide variety of interesting prospects, including banking mandates and development opportunities.”