BNP Paribas Real Estate has bought a leisure complex in the West Midlands on behalf of Surrey County Council.
The 37,715 sqft Worcester property, anchored by a cinema and containing 13 retail units, was sold for £11.3m (€13.1m).
Andrew Meikle, senior investment director at BNP Paribas Real Estate, said: “The location is already the core leisure destination for Worcester and the surrounding area, which will only get stronger due to the development of more leisure space in the immediate vicinity.”
The acquisition comes as Surrey’s local authority pension scheme weighs up investing in a new UK leisure property fund, the second launched by one of its its existing external managers.
The Surrey Pension Fund cited the success of its 2013 investment in the Darwin Leisure Property Fund, which has achieved an annualised three-year return of 11.2%, as one of the reasons it was considering the latest fund launch.
Its stake in the inaugural Darwin fund has risen from £20m to £27.3m in value.
In documents prepared for the £3.2bn fund’s most recent pensions committee, Sheila Little, director of finance at Surrey County Council, noted that the first Darwin fund, established in 2008, had put in place a soft close and was turning its attention to the launch of a second fund, which would also invest in UK holiday parks showing “potential” for redevelopment.
“Secondly,” she added, “unlike the Darwin Leisure Property Fund, this fund will utilise modest gearing at a level of around 20% to help finance acquisitions and redevelopment.”
The director of finance noted the significant cost savings the pension fund could achieve by committing to the new launch early – highlighting annual management charges of 0.5% or 0.6%, depending on the investor’s decision to lock in capital for a decade, compared with an AMC of 0.75% and 0.85%, respectively, after April 2017.
A spokesman for the council told IPE Real Estate the pensions committee had deferred its decision to commit £20m to the Darwin Leisure Development Fund, a small part of the £300m in capital desired by Darwin, to the next meeting, scheduled for 10 February.
Darwin’s first fund has so far invested in 19 leisure parks across England and Wales, with assets worth £478m.
