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Recently put up for sale is a significant proportion of the portfolio held by the Jersey-based Hercules Unit Trust (HUT), the UK’s largest specialist retail warehouse fund, managed by Schroder Property and advised by British Land. The trust was established in 2000 with the intention of acquiring and managing some of the UK’s largest retail developments, with traditional tenants such as Arcadia and TK Maxx.
As much as one-fifth of the trust’s property portfolio has been offered for sale, under the tag ‘Project Orange’. The portfolio, valued at around £300 million, is made up of various secondary out-of-town retail developments around the UK, with total space amounting to around one million square feet, around a quarter of its total portfolio space. The project is being marketed by CBRE, with a quoted yield of 5.75%. The sites include Parkgate in Rotherham, fully let with tenants such as Marks & Spencer, River Island, Asda Living and Argos. However, this site was purchased by HUT in 2005 for £260 million, being valued today at almost a third less than in 2005.
Other locations include Hatters Way in Luton and Crown Wharf in Walsall. Last year HUT sold the Leamington Shopping Park after British Land’s input transformed the site from large-goods retail to a successful fashion-led retail site.
British Land advises the trust, as well as owning 63.5% of the shares, a figure that increased from 49.2% a year ago as a result of a £66.8 million investment by the company.
It is expected that the funds raised by the sale will be invested back into HUT.
This news was brought to you by Morgan Pryce, a specialist tenant acquisition agent with offices in Oxford Circus and the City. Morgan Pryce specialises in search, negotiation and project management and works exclusively for tenants.