Strathclyde Pension Fund sells fund shareholding for retail assets

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  • Strathclyde Pension Fund sells fund shareholding for retail assets

EUROPE - Strathclyde Pension Fund has sold its 35% shareholding in the Junction Thurrock Unit Trust to a fund managed by UK property firm Capital & Regional in a complex deal that involved the simultaneous acquisition of two of the fund's assets.

The scheme effectively swapped its minority shareholding, held by Strathclyde Pension Fund Property Unit Trust No 2, for West Thurrock Retail Park and an adjacent retail unit.

Capital & Regional paid Strathclyde £3.9m (€4.8m) as part of the deal for full control of three retail parks acquiring the minority interest will give it.

In a note to the market, Capital & Regional described the price as "a small premium" based on prevailing valuations of the parks and anticipated profit from planned redevelopment of Lakeside Leisure Park, one of the assets.

The remaining assets in the £288m fund include four mature and two development out-of-town retail parks in secondary locations.

DTZ, which manages the AUM £10.8bn pension scheme's £825m real estate allocation with the exception of a directly held private equity portfolio, did not respond to requests for comment before deadline.

However, a spokesman for Capital & Regional said the deal would give it outright ownership of assets it had previous part-owned in a fund in which it is a 13% shareholder.

In the autumn, Capital & Regional and the vehicle's other shareholders, which include Aviva Investors, will vote on whether to continue the fund.

Their options include shunting the assets into another fund and dissolving the existing vehicle.

A spokesman at the company said: "No decisions have been taken, but, obviously, investors will be looking to maximise value."

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  • QN-2546

    Asset class: Real Estate Equity Fund (non listed).
    Asset region: Europe.
    Size: Total CHF 600m, approx. CHF 100-300m per fund investment.
    Closing date: 2019-06-28.

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