Legal & General Property (LGP) has announced, on behalf of its UK Property Income Fund (UK PIF), that it has successfully completed the sale of Fremlin Walk in Maidstone to M&G Real Estate for £110m, reflecting a net initial yield of 6%.
Acquired by LGP in December 2010 for £91.6m, reflecting a net initial yield of 7.61%, Fremlin Walk is an open air shopping centre comprising 350,000sq ft of modern retail space and a 760-space car park. Anchored by an 100,000sq ft House of Fraser Department store, the site comprises 49 units in total, let to a number of leading national brands including Superdry, Zara, H&M, Boots, Top Shop, Fat Face, Waterstones and Costa Coffee. The sale excludes 66 Earl Street which has already been sold separately to a private individual for £275,000.
Reaching its final close at the end of 2011, having secured a total of £300m of equity from 14 major international institutional investors, UK PIF, like its successor fund, UK PIF II, is characterised by its highly innovative debt structure which enables both geared and ungeared subscriptions, providing investors with flexibility to select their optimal appetite for debt. Seeking to generate strong returns through careful stock selection, both funds are focussed on properties with strong income streams and the opportunity to capitalise on LGP’s strong asset management track record and sector specialist skill set.
Charlie Walker, fund manager of UK PIF and UK PIF II, said: “The UK PIF strategy is all about strength of income and Net Operating Income growth, and Maidstone has delivered for us on both counts. Through creative active management we have moved rents onwards from £90 per sq ft to £120 sq ft Zone A, delivering new fascias along with a strengthened footfall and scheme turnover. Maidstone’s shoppers are clearly happy, as too are our investors.”
CBRE acted for LGP, while Cushman & Wakefield represented M&G Real Estate.
