M&G Real Estate snaps up €140m mall at 6% yield

M&G Real Estate has acquired the Fremlin Walk shopping centre in Maidstone, UK from Legal & General Property for £110 mln (€140 mln), reflecting a net initial yield of 6%.

The acquisition was made on behalf of M&G Property Portfolio, managed by Fiona Rowley and Justin Upton. This deal follows the fund’s recent purchases of Parc Trostre retail park in Llanelli for £156 mln and Aliffe House in Aldgate for £36.7 mln.

Developed on the former Fremlin’s Brewery site, the 350,000 sq ft (32,500 m2) open air, single level scheme is anchored by a 100,000 sq ft House of Fraser. The asset comprises 50 tenant units and a 760-space car park. The majority of these units are let to national brands including Superdry, Zara, Top Shop, H&M, Boots and JD.

The mall was acquired by LGP for its UK PIF vehicle in December 2010 for £91.6 mln, reflecting a net initial yield of 7.61%.

'The UK PIF strategy is all about strength of income and Net Operating Income growth, and Maidstone has delivered for us on both counts,' commented Charlie Walker, fund manager of UK PIF and UK PIF II. 'Through creative active management we have moved rents onwards from £90 per sq ft to £120 sq ft Zone A, delivering new fascias along with a strengthened footfall and scheme turnover. Maidstone’s shoppers are clearly happy, as too are our investors.'

Cushman & Wakefield acted for M&G Real Estate. Legal & General Property was represented by CBRE.