Codenamed Project Orange — and containing one-million square feet of retail space — two of Britain’s biggest property companies have put a £300m portfolio on the market.
Part of the Hercules Unit Trust (HUT), British Land and Schroder Real Estate are selling around a fifth of the £1.5bn jointly held portfolio. All the out-of-town retail assets are in regional locations and their disposal is designed to “test investor appetite” in the secondary retail market.
The largest asset in the portfolio is the 561,000 sq ft Parkgate Shopping Park at Rotherham. Currently fully let its long-term tenants include Marks & Spencer, Nike and River Island. HUT acquired Parkgate in 2005 for £260m. A recent valuation priced it at just £180m.
The 174,000 sq ft Crown Wharf Shopping Park in Walsall, the 118,000 sq ft Hylton Retail Park in Sunderland, and the 82,500 sq ft Hatters Way Retail Park in Luton are the other parks in the portfolio.
Property and commercial real estate adviser CBRE has been appointed to market the portfolio on an off-market basis.
HUT is Britain’s biggest specialist retail and warehouse property unit trust. It owns and manages 19 retail and shopping parks, including Glasgow’s Fort Shopping Park and has a 50 per cent holding in Edinburgh’s Fort Kinnaird Shopping Park. The trust’s combined assets encompass more than 4.5m sq ft of floorspace.
British Land has a 63.5 per cent stake in the trust, which has grown from 49.2 per cent in just over a year. Schroder Real Estate is property trust with a fixed life to 2020, and acts as HUT’s fund manager.
