UK - The South Yorkshire Pension Fund has agreed to fund a shopping centre redevelopment in Wales for £11.8m.
Developer St Modwen has obtained planning consent for the redevelopment of the Deeside district centre in Connaghs Quay, Flintshire, and has secured investment for the development from the local authority fund.
The centre will be anchored by a 52,000 square foot foodstore, pre-let to Morrisons on a 35-year lease, in addition to a further 20,000 square feet of rentable retail space.
Work will start on the redevelopment in September with completion scheduled for the summer of 2010.
The deal comes at a time when funding for development in Europe is almost non-existent.
Paul Batho, development manager at St Modwen said: "We are very pleased, because getting development funding for any property project at the moment is quite rare. We were pleased that it does give a vote of confidence in both our scheme and in us in being capable of delivering it."
Standard Life Investments and Whitaker Horton advised South Yorkshire Pensions Authority, while Cheetham & Mortimer advised St Modwen.
Rob Millington, head of investment at Cheetham & Mortimer, said: "Despite tough conditions, this deal proves to a skeptical market that development funding is available for high calibre investments, although the defensive quality of the supermarket sector and the substantial nature of the developer were key drivers in delivering a satisfactory outcome."
John Hattersely, fund manager at South Yorkshire said the pension fund was "constantly monitoring" its portfolio and looking to invest in opportunities in the UK when they arise, "if we think they are appropriate".
Hattersely said that pension fund was more of a buyer than a seller in the current market and was looking for properties that are expected to outperform in the medium to long-term.
"Like every other man and his dog, we are looking for secure covenants and secure income streams," he added.
No comments yet