CANADA/UK - The Canada Pension Plan Investment Board (CPPIB) has entered into a joint venture with UK property company Hammerson to take advantage of the forced sale of a prime UK retail asset.
The 50:50 joint venture has bought Retail Property Holdings from The Elementary Property Company, currently in receivership, the main asset of which is the freehold interest in Silverburn, a 93,000 square metre shopping centre near Glasgow, Scotland.
The purchase price for the property, including the costs of acquisition, was £297m (€335m), representing a commitment from each party of £148.5m.
The current gross rental income is £18.4m, representing an initial yield of approximately 6% and an equivalent yield of 6.8%.
Silverburn, which opened in 2007, is a single-level covered centre anchored by retailers Debenhams, M&S, New Look, Next and Tesco Extra.
It houses 94 retail units let to high-quality retailers, has an occupancy level of 98%, and an average unexpired lease term of over 12 years.
"This transaction represents a unique opportunity to acquire a high-quality asset alongside one of the top retail developers and operators in Europe," said Graeme Eadie, senior vice-president of real estate investments at CPPIB.
Hammerson said the shopping centre offers opportunities to create value through active asset management.
David Atkins, chief executive at Hammerson said: "[Silverburn] provides a good range of retailers in a strong catchment area. Regional centres like Silverburn have shown strong performance in their first 10 years of operation and we believe that by applying our skills at asset management and optimising the tenant mix, we can increase retail sales and achieve good growth from this asset."