Rockspring Property Investment Managers, on behalf of UK Value 2 LP, has acquired Walnuts Shopping Centre in Orpington, Kent from a private Kuwaiti investor and Miller Developments for £43.9 million, reflecting a net initial yield of 6.5%. It is the sixteenth acquisition to be concluded by the Fund and brings the total aggregate value of assets in UK Value 2 to over £450 million.
Walnuts Shopping Centre is located in Orpington’s town centre and comprises 2,118m2 (205,000ft2) of retail and leisure space, as well as a 63 bedroom hotel development which is pre-let to Premier Inn and due for completion in May 2016. The existing shopping centre has strong tenant covenants from leading national brands including Peacocks, New Look, Argos, The Works and The Entertainer. The new leisure development, totalling 5,709m2 (61,450ft2), is due to open in February 2016 and includes a seven screen cinema and restaurant complex and has been majority pre-let to Odeon, Bella Italia, Pure Gym, Dean’s Diner and B&M.
Richard Bains, Rockspring partner and fund manager of the UK Value series, said: “This transaction follows the successful recent acquisition of Fairhill Shopping Centre in Northern Ireland and marks the fifth regional shopping centre that we have acquired for the Fund, bringing its total retail exposure to approximately one third. UK Value 2 is now around 90% invested and Walnuts fits the fund’s strategy perfectly. It is within the M25, off a low rental base, has a strong catchment and provides opportunities for both asset management initiatives and rental growth in the near term. The current redevelopment will revitalise the centre and we are planning additional improvements, including further leasing activity to new retailers with discussions already underway.”
David Milloy, joint managing director, Miller Developments, said: “Having completed the development of the new leisure accommodation and secured the hotel pre-letting to Premier Inn, it was a natural point for us to sell our interest having added significant value in the process”.
Rockspring UK Value 2 is the second fund in a sequential, UK-only closed-ended real estate strategy with a core plus risk profile. The Fund held its final close earlier this year, which, at eight months, was the fastest fundraise Rockspring has achieved in its 30 year history. Rockspring secured a total of £342 million of equity from 11 investors for the Fund, which will have a duration of seven years. The fund has a diverse portfolio; earlier this year Rockspring Property Investment Managers LLP, on behalf of Rockspring UK Value 2 LP and Caisson Investment Management, acquired four industrial assets across the UK for a total of €41.68 mln (£30 mln).
