10   May,   2022

DTZ Investors acquires a modern South East retail park in Basingstoke for £50.95m

DTZ Investors has completed the acquisition of St Michael’s Retail Park in Basingstoke for £50.95m from the Pears family.  Knight Frank represented DTZ Investors.

The property was developed in 2018 and comprises 110,215 sq ft of modern retail warehouse space arranged across 12 units.  The asset benefits from good ESG credentials as well as an attractive WAULT of 9.2 years to break and 10.6 years to expiry.  It is fully-let at a contracted rent of £2,323,300 per annum, with 32% of the income benefitting from index-linked rent reviews or stepped rent increases.

The diversified tenant-mix offers convenience, discount and bulky retail plus a supporting leisure offer with occupiers including Aldi, The Food Warehouse, Smyths Toys, Currys, Wren, Nando’s and Costa.

Situated in the South East, St Michael’s Retail Park acts as Basingstoke’s primary out of town retail provision and the local supply is expected to reduce with 100,000 sq ft of competing space subject to change of use, putting upwards pressure on rents.

Ben Haller, Director at DTZ Investors, comments: “This asset has strong fundamentals and we are delighted to have completed the acquisition.  The asset quality, the scheme’s dominance and the tenant profile are additive to both the Fund’s investment and ESG strategy.  Furthermore, the index-linked reviews and rental growth potential from an affordable level today will boost performance over time.  DTZ Investors has appetite for further investment in to the sector.”

Freddie MacColl, Partner at Knight Frank adds: “Demand for high quality, South East retail parks is incredibly competitive so we are pleased to have secured St Michael’s Retail Park on behalf of our client.  Investors continue to be attracted by the relative value in retail warehousing supported by resilient income over the past few years alongside strong occupier take-up in 2021.”  

Morgan Williams represented the vendor.