9   March,   2023

DTZ Investors invests £59m to acquire prime Purley Cross Retail Park, Croydon

DTZ Investors has completed on the purchase of Purley Cross Retail Park in Croydon for £59,000,000 from Oval Real EstateGreen & Partners and DTRE acted jointly for the vendor with HampsonWall representing DTZ Investors.

The property is a prime retail park comprising 126,410 sq ft of lettable floorspace across five units which occupy an 8.6-acre site.  The scheme is fully-let with a WAULT of 11.9 years to break and 12 years to expiry, producing a net rent of £3,439,891 pa from the occupational leases.  Further income is derived from existing PV and EV infrastructure and there is a 61% income exposure to indexed rent reviews.  The tenant-mix creates a complementary hybrid use between the Aldi and M&S supermarkets alongside Smyths Toys, Currys, M&S general merchandise and Starbucks.

Croydon has a reputation as one of the UK’s leading retail warehouse locations due to its draw from a large catchment across the South London arc and surrounding Counties.  The micro-market is underpinned by low vacancy and constrained supply alongside a track record of robust occupier trade.  Three quarters of the asset’s lettable area is either new or newly refurbished with the M&S unit having just benefitted from a multi-million works package linked to the letting.  The Aldi, Smyths Toys and Starbucks block was newly developed in 2021 and the Currys unit was substantially refurbished around 2010.

Ben Haller, Director at DTZ Investors:  “We are delighted to have secured this asset with such strong fundamentals.  The occupational dynamics in Croydon, in tandem with the WAULT and tenant profile, offers resilient income with prospects for growth.  The underlying location gives flexibility for alternative land uses over the long term whilst the quality of physical real estate immediately strengthens the Fund’s responsible investment objectives.  

Joe Wall, Director at HampsonWall: “We are beginning to see a resurgence in institutional demand for the prime retail warehouse assets over the past few months which DTZ Investors has spearheaded with this acquisition.  This sort of asset is rarely available and offers defensive income in a core location to counteract current market risks.  Positively, the UK’s economic outlook may not be as severe as some predicted at the tail end of last year and we expect to see a busy 2023 as conditions stabilise and investors actively pursue opportunities to deploy capital.”