Henderson to acquire 3 UK outlet malls for EUR 461m

Henderson Global Investors (HGI) has exchanged contracts to acquire three outlet malls in the UK for £364.5mln (EUR 461mln), making it one of the largest commercial property deals in the UK so far this year.

CB Richard Ellis, which acted for Henderson, said Cheshire Oaks, the largest outlet mall in the UK, and the other two at Swindon and Bridgend, were sold by a consortium of investors, including AXA REIM, BP and Morley, at a net initial yield of almost 7%.

The portfolio comprises 341 units over a total of 72,700 m² of space. The tenants' list include the first John Lewis outlet; M&S, Next, Gap, Nike, Polo Ralph Lauren, Austin Reed and Jaeger. Cheshire Oaks is the largest outlet mall in the UK.

Henderson acquired the portfolio after a £181mln equity raising in under three months to launch the UK Outlet Mall Fund (UKOMF). Henderson and McArthurGlen have each co-invested in the venture. Debt for the acquisition was provided by Bayerische Landesbank in an un-syndicated loan.

UKOMF, a Scottish Limited Partnership, is a 10 year closed-ended fund and aims to deliver an IRR of 10% per annum over its life, and a target distribution yield of approximately 6% per annum. UKOMF also aims to deliver an Internal Rate of Return of 13% per annum over the first five years.

Greg Nicholson chairman of CB Richard Ellis's capital markets division, commented: 'To agree and conclude a deal of this magnitude with all its complexities in the present market with the number of investors involved on both sides is testament to the team spirit each side adopted with the other on the transaction. Robust and forensic due diligence up front was critical to its success.'