Invesco Real Estate (IRE), the international property investment manager, is pleased to announce that it has completed the first acquisition for its third UK fund of a retail property in Bromley, London for £17.05 million (approx. 20.4 million).
The property is predominantly let as a department store to British Home Stores (BHS Ltd.), one of the UK's leading department store operators, with an office component let to Selection Services Ltd, a computer services firm. The 9,665-m² property is located on Bromley's pedestrianized high street, opposite The Glades shopping center, and benefits from a 99-year lease with 65 years remaining to BHS Ltd on an upward-only rental review, every five years.
Tobias Simon, Director of Fund Management at IRE comments: "I am delighted with this first acquisition for our third UK fund, which was identified by our local transactions team. It is a good transaction to begin building the fund's portfolio as it complements the investment strategy by focusing on strong real estate fundamentals. In particular, the long remaining lease length and rent review mechanism, which we believe is an important element in delivering performance going forward, combined with the quality of the location are key strengths appealing to the fund's investors. We believe the forthcoming months will provide good opportunities to acquire further attractive investments in the UK marketplace."
Bromley is ranked in the UK's top 10% of retail locations by shopping catchment and retail spend (PROMIS, November 2010) and the property itself, which occupies a prime location within the town center, represents one of the top trading stores for BHS Ltd countrywide. IRE's Autumn 2010 House View suggests that retail assets are expected to provide long-term stability and real rental growth within fund portfolios over our forecast period, of which we believe the latter will be the driving force for returns over the next five years.
Source: Invesco Real Estate