TIAA Henderson Real Estate has sold a regional UK retail property for £78m (€98.5m) at a net 4.25% yield.
The Blackwater Shopping Park in Farnborough was sold on behalf of TH Real Estate’s £1.1bn UK Retail Warehouse Fund to Lothbury Property Trust.
Michael Neal said the fund, which bought the 10,000sqm park in 2004, delivered a five-year total return of 17.6% to June this year, against an estimated benchmark of 12.6%.
With the final yield on the retail park driven down, UK retail is seeing increased appetite for regional parks, shopping centres and high street properties. TH Real Estate’s sale is close to the new benchmark yield set by Lend Lease’s recent sale of a 30% stake in the Bluewater shopping centre in Kent to Land Securities.
By the halfway point this year, yields for prime shopping centres were averaging 5.25%, with secondary centres at 6.75%, according to DTZ.
CBRE, meanwhile, notes that in the second quarter of this year, investors continued to be more active outside London, estimating that around 60% of total investment across all sectors in the UK occurred outside the capital.
With regional real estate back in demand, shopping centres in particular are enjoying increasing appeal. Shopping centre investment rose £500m or 22% year-on-year to £2.73bn in H1, according to DTZ.
High street retail is also seeing increased investor appetite, DTZ noted, with a “healthy level of demand from institutional investors” and investment volumes up 30% year-on-year at the mid-way point of this year.