UK - A listed company specialising in edge-of-town and out-of-town retail has acquired assets from Nottingham local authority pension fund and Xerox Pensions for a total of £22.7m (€26.3m).
The £2bn Nottingham scheme sold Biggleswade Retail Park to LXB Retail Properties, which also acquired a DIY retail unit from Xerox pension fund. Aberdeen manages both pension schemes' property portfolios.
Fund manager Ed Crockett, who manages the Nottingham pension fund's 11% property allocation, said it had sold the asset because LXB had made "an attractive offer" with an income yield dramatically ahead of the market.
"There are definitely opportunities within the asset but we wouldn't be able to get it out given the size of the fund," he said. "If you were to buy the adjoining land, you'd be talking about a £30-£40m site, and that would be too large for this fund."
LXB acquired the assets as part of a 15-acre, £38.7m site strategy following the acquisition of two other assets from private investors over the past few weeks.
A spokesman for LXB finance director Brendan O'Grady said the asset was attractive because of the retail catchment area and transport links. "They're concerned with specific assets. In this case it was the right asset in the right location," he said.
Although some planning permission has already been granted, the firm submitted applications for what it described as "a comprehensive redevelopment". This is a departure from its usual targets: sites with planning permission already granted.
Despite a report from ING Real Estate Investment Management this week suggesting out-of-town centres comprised an exception to an otherwise bullish outlook for European retail, Crockett said the scheme would look to re-invest in the sector.
"We're still looking to invest in commercial property, and to recycle cash into other property assets," he said. "In this fund, the allocation was right for warehousing so we'll be looking to replace the asset. You can still find attractive assets - and we intend to."
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