Episo links up with Addington to buy 3 UK malls out of administration

European Property Investors Special Opportunities (EPISO), a fund co-advised by AEW Europe and Tristan Capital Partners, has partnered with Addington Capital to complete the purchase of the Sapphire Retail Portfolio in the UK for £145 mln (EUR 167 mln), representing a net initial yield of 7.75%.

The portfolio comprises three regional shopping centres; Charter Walk, Burnley, Queens Arcade, Cardiff and the Harvey Centre, Harlow. The centres comprise over 1,125,000 sq ft (116,000 m2) of retail and ancillary accommodation and are let to over 270 tenants. The current net income from the portfolio is approximately £12 mln per annum.

The centres were put into administration in August last year by a syndicate of Banks led by LBG. Grant Thornton was appointed as administrators and London & Associated Properties as asset manager.

'We are buying these properties at a tough time in the cycle, but we think there is a lot of upside potential. We are glad to be further diversifying the fund by investing in the UK shopping centre market,' said Ric Lewis, CEO of Tristan Capital Partners.

Martin Roberts of Addington added: 'We are delighted to have secured the Sapphire portfolio as our first investment deal with our partners at AEW Europe and Tristan Capital and are looking to double the size of the targeted investment portfolio over the next 12 months if conditions allow. We believe that our ability to move quickly and provide certainty with the support of a cash underwritten bid was decisive in securing the portfolio in the face of some high quality competition.'

Addington Capital will be retained as asset manager of the portfolio, overseeing the property and facility management and driving the lease up of the centres.

Addington & Episo were advised by King Sturge, the administrators were advised by Franc Warwick.