Orchard Street Investment Management has acquired Hermiston Retail Park in Consett, County Durham on behalf of St James’ Place UK Plc for €39.6m (£35.31m) from Aviva Investors. The purchase price reflects a net initial yield of 6.25%.
Representing the dominant retail park in the local area, the 157,000 ft² scheme is anchored by a Morrisons supermarket with other retailers including B&Q, Carpetright, Pets at Home, Poundland, Matalan and Sports Direct. The Park benefits from a long weighted average unexpired lease term of 16.3 years to expiry and 13.2 years to break and is let off modest rents between €11.2 (£10) and €19.8 (£17.68) psf, with the supermarket lease providing five yearly RPI linked uplifts. Currently one of the units in the park is unlet, providing an opportunity to enhance the tenant mix at this popular, locally dominant scheme.
Hermiston Retail Park benefits from convenient transport links, occupying the eastern side of the A692, less than half a mile south-east of Consett town centre and adjacent to the new Consett Academy and Leisure Centre.
Tom Chadwick, Associate Partner at Orchard Street, commented: “This is a good quality retail park let off affordable rents which serves the local catchment very well. At a 6.25% yield, the length and quality of the income are very attractive especially when 50% of the income is attributable to the Morrison’s supermarket which has circa 20 years to lease expiry and RPI reviews.”