AUSTRALIA/UK - The Australian government's Future Fund has bought a 33% stake in the Bullring in Birmingham, England from Land Securities.
The one-third interest in the trophy retail asset was purchased for £210m (€232m) from the British property company, reflecting a net yield of 6.85% after settlement of outstanding rent reviews.
The acclaimed 110,000 square metre shopping centre opened in Birmingham's city centre in 2003, is anchored by two department stores and accommodates some 160 retailers and catering operators, and provides a total annual rental income of £45m
Land Securities put its stake on the market in April 2008, having developed the centre in conjunction with the Birmingham Alliance, Hammerson and Henderson Global Investors.
"The Bullring was instrumental in transforming the Birmingham retail offer and has performed well for us," said Richard Akers, managing director Land Securities retail.
"However, the absence of operational control over the Bullring made it an unusual asset within Land Securities' portfolio where we look to create value through successful development and active management of properties. The funds generated by the sale will increase the group's flexibility to exploit future opportunities."
Australia's Future Fund was established in 2006 to invest across asset classes to offset the government's unfunded superannuation liabilities.
The Future Fund had A$61bn (€35.8bn) by 30 June 2009, of which 1.4% (or A$757m) is invested in real estate.