Europa Capital buys UK shopping mall at 30% discount

UK property investor Europa Capital confirmed on Thursday it has bought the Fremlin Walk shopping centre in Maidstone for around £70 mln (EUR 82 mln) from Land Securities in a joint venture with asset manager SCOOP AM. The deal reflects a yield of between 8.5-8.75%.

The acquisition is earmarked for the company's Europa Fund III and is the fund's first retail purchase in the UK. It follows hard on the heels of Europa Capital's acquisition last month of the Forum Steglitz shopping centre in Berlin from UK REIT Hammerson for a gross sum of EUR 70 mln, reflecting a net initial yield of 8%.

Land Securities put the 350,000 sq ft (32,000 m2) shopping centre in Maidstone on the market earlier this year for £100 mln as part of a wider disposal programme aimed at reducing its debt. The House of Fraser-anchored scheme generates annual rental income of £6.1 mln.

Europa Capital raised EUR 750 mln in capital from mainly US and European investors earlier this month, giving it in excess of EUR 2.5 bn in spending power for its European property investment programme. The Europa Fund III is Europa Capital's third pan-European fund investing in Western and Central Europe to which EUR 600 mln has been committed,

SCOOP AM is a recently established property asset management company owned by Stuart Farnell of Gemtree and Graham Cole of Guildhouse Group.