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Retail Warehouse Fund Sells Leeds Retail Park for 6.15% Yield

Henderson Global Investors’ Retail Warehouse Fund has sold its Junction 27 Retail Park, Leeds to The UK Commercial Property Trust Limited (the Trust), the UK’s largest UK commercial property investment trust, for £56.63 million, reflecting a net initial yield of 6.15%.

Retail Warehouse Fund Sells Leeds Retail Park for 6.15% Yield

Junction 27 is a bulky goods retail park totaling 122,376 sq ft spread across eight units with 540 car parking spaces. Originally developed in 1999, the park’s key anchor tenants include DSG Retail, t/a Currys, Comet Group Plc, Homestyle t/a Harveys, CSL Lounge Suites Ltd t/a CSL, Furniture Village Plc, Barker & Stonehouse Ltd,  A Share and Sons t/a SCS and TGI Fridays Ltd .

The current gross annual rent receivable in respect of the properties is approximately £3.7 million per annum.

Michael Neal, Manager of the Retail Warehouse Fund at Henderson Global Investors commented:  “The sale of the Junction 27 Retail Park provides us with a great opportunity to recycle capital within the fund.  We have worked hard on the asset management of the park in order to create value and intend to use the proceeds to acquire new assets where we can clearly identify opportunities to enhance returns for our investors.”

“This asset has performed exceptionally well for the Fund over the last year, having delivered a 12 month total return of approximately 75% at property level. It demonstrates the dramatic positive shift in sentiment that has occurred in the retail warehouse sector particularly for well-managed schemes at the prime end”

Robert Boag, manager of the UKCPT, added: “This purchase represents a significant investment which is funded by the equity raised by the Trust earlier this year. The latest acquisition increases the portfolio asset base and the UKCPT’s exposure to retail warehousing that offers medium to long term growth prospects. We see numerous asset management opportunities to improve income and deliver a strong income return in both Shrewsbury and Junction 27”

The park forms part of a dominant regional retail location considered to be one of the Top 5 Retail Warehouse locations in the UK.

Boag continued “More purchases will follow and this is in line with the UKCPT’s strategy of acquiring further commercial stocks that will improve income and capital prospects for the portfolio going forward.”

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