Henderson UK Retail Warehouse Fund and USS seal £100m in deals

Henderson Global Investors' UK Retail Warehouse Fund has completed two transactions totalling more than £100 mln (EUR 110 mln) with Universities Superannuation Scheme (USS).

The HGI fund sold two retail warehouse assets in Newcastle to USS for £50 mln. The sale of the assets, in turn, accounted for half of the £101 mln investment for the fund to acquire USS's interest in Manchester Fort Shopping Park.

USS received the remaining £51 mln of the consideration via the issue of new units in the UK Retail Warehouse Fund, in which USS was already an investor.

Henderson Global Investors said the acquisition price for Manchester Fort Shopping Park reflects a net initial yield of approximately 7.1%, including rental guarantees. Totalling 30,000 m2, the 36-unit retail park dominates the north Manchester catchment area and the tenants include Next, TK Maxx, B&Q and Boots.

The sale of Kingston and Belvedere Retail Parks in Newcastle to USS reflects a net initial yield of 5.75%, subject to the settlement of the outstanding rent reviews.

The equity injection of £51 mln enables the fund to reduce its LTV position. The fund's gross asset value following this transaction totals £922 mln.

Graham Burnett of USS, said : 'This transaction has enabled us to diversify our retail warehouse holdings with the acquisition of two strong open A1 retail parks in Newcastle, together with an increased investment in the Henderson UK Retail Warehouse Fund. USS has acquired in excess of £450 mln during 2009 prior to this transaction and we continue to pursue other opportunities'.

Morgan Williams acted for Henderson in respect of the sale and purchase and Cushman and Wakefield and Jones Lang LaSalle Investment Advisory acted for USS. Law firm KL Gates acted for Henderson with DLA Piper LLP acting on behalf of USS.