Hercules Unit Trust ('HUT' or the 'Trust') the specialist retail warehouse fund managed by Schroders and advised by The British Land Company PLC, has exchanged on sales generating £166 million.
Malvern Retail Park has been sold to Consolidated Property Group Investors LLP for £48 million, reflecting an initial yield of 6.5%. HUT was advised by CBRE; Savills advised Consolidated.
The Waterfields Retail Park, Watford, has been sold to Warburg-Henderson (Pan Europa Fonds Nr.3) for £41 million, assuming the settlement of outstanding rent reviews, reflecting an initial yield of 7.1%. Cushman and Wakefield acted on behalf of HUT and Harvey Spack Field acted on behalf of the purchaser.
Finally, HUT has sold a 50% stake in the Deepdale Retail Park, Preston and Eastgate Retail Park, Bristol, where it held a 50% share in the property, to LaSalle, on behalf of HSBC Bank Pension Trust.
The stake in Preston has been sold for £58 million, assuming the settlement of outstanding rent reviews. The purchase price reflects an initial yield of 7.0%. HUT's 50% interest in Eastgate has been sold for £19 million, assuming the settlement of outstanding rent reviews reflecting an initial yield of 7.3%. HSBC Pension Trust also acquired the Silverlink Retail Park from HUT earlier in the year.
HUT was not advised and Wilkinson Williams acted on behalf of the purchaser on both transactions.
The sales form part of HUT's successful strategy to recapitalise and position the fund to take advantage of opportunities presented in the future. Since the beginning of the year, the Trust has sold circa £380 million of assets and has unlocked additional capital through the subscription for £100 million of subordinated Convertible Notes by the Canada Pension Plan Investment Board. A further £100 million will be offered through the issue of Notes to the Trust's existing investors, of which £50 million has been underwritten by British Land. HUT's LTV now stands at circa 31%.
Commenting, Andrew Jones, a Director of British Land, said: "HUT has always looked to recycle its properties following an intense period of asset management. Completion of these sales means that the Trust has now moved from being a net disposer into a new acquisition phase. The receipts from these sales, together with the £200 million of capital raised from the Canada Pension Plan Investment Board and existing
investors, will give us terrific fire power in a market that will throw up some tremendous opportunities."