Orchard Street Investment Management LLP, the specialist commercial property investment manager, announces that it has completed the acquisition of Cardiff Bay Retail Park from Invista Real Estate Management and Schroders for £54.5 million (approx. 62 million), reflecting a net initial yield of 6.25%.
Cardiff Bay Retail Park is located in Cardiff Bay, Europe's largest waterfront development and home of the Welsh Government. With a strong range of tenants including Boots, Argos and Bhs, the park is part of a substantial retail hub that includes IKEA and Asda.
Commenting on the acquisition, Gary Felce, Orchard Street Chief Investment Officer, said "The combination of tenants, a secure income profile and some interesting asset management opportunities make Cardiff Bay Retail Park an excellent investment opportunity.
"In the past few years the Cardiff Bay area has developed a first class profile with significant residential, commercial, leisure and retailing facilities. We are very excited to have made this acquisition in what is clearly one of the most dynamic locations in Wales."
This latest acquisition concludes an extremely active six-month period during which Orchard Street completed around £400 million of investment and asset management activity in the UK.
Among the highlights were the separate acquisitions of three shopping centers with a combined value of around £150 million. These were Old George Mall shopping center in Salisbury, Three Spires shopping center in Lichfield and the Market Walk shopping center in Chorley.
In addition Orchard Street acquired St David's Retail Park in Bangor, agreed funding for a £37-million office development for Microsoft's UK headquarters in Cambridge and completed the acquisition of a portfolio of seven industrial estates for £50.4 million.
Orchard Street also disposed of the Marble Arch Tower, London, for approximately £80 million and two office buildings at Centrium Business Park, St Albans, for a total of £13.38 million.
From an asset management perspective, in the first half of 2011 Orchard Street completed 13 lettings and lease renewals with a total annual rental value of circa £1.3million.
Transactions included the lettings of 6,186 ft² at 55 Davies Street to Adam Street Partners at an annual rent of £309,300, completing the letting program for that property; 5,370 ft² to Waitrose at Sutton Coldfield at £95,000 pa, one of the first of their new convenience stores to open in the UK; and the letting of a 15,400-ft² retail warehouse unit in Aberdeen to Poundland at an annual rent of £150,000.
In the first half of the year, a £3-million refurbishment project at 83 Pall Mall was completed and 6,300 ft² of grade-A offices are under offer with a further 5,750 ft² available. A major office refurbishment project is underway at 11 Strand, which will deliver 35,166 ft² of grade-A offices in September.
Commenting on activity in the first half, John Humberstone, Partner at Orchard Street Investment Management, said: "The acquisition of Cardiff Bay Retail Park concludes an extremely active and successful first half for Orchard Street.
"Our acquisitions in the retail sector reflect a specific opportunity we identified at the end of 2010 for good quality retail locations underpinned by secure income and reversionary potential, where there is the added potential for asset management.
"We look forward to building on this level of success in the second half of 2011."
Source: Orchard Street Investment Management
