UK - The £28bn (€31.7bn) Universities Superannuation Scheme has bought large retail and industrial assets in the UK and plans to make more acquisitions in the near future as it looks to rebuild its domestic portfolio.
USS has bought Marsh Mills retail park in Plymouth, England, from Aviva Investors for £27.5m, reflecting a yield of 9.5%, on settlement of the outstanding rent reviews.
Marsh Mills is Plymouth's largest out-of-town retail destination and is home to tenants such as Homebase, Furniture Village, Halfords, CapetRight, PC World and DFS.
The pension fund has also purchased Prologis Park, a multi-let industrial estate in Bromley-by-Bow, Greater London, from Standard Life Investments for £48.6m, reflecting a net initial yield of 8.25%.
The 46,061 square metre estate comprises six units with tenants Royal Mail, Iron Mountain, Crown Records, Menzies Distribution, Oldfields and Maas Systems.
"This is an excellent acquisition which provides the fund with long unexpired leases to established covenants, within half a mile of Canary Wharf, and offering great accessibility to the City of London and the Olympic zone," said Andrew Pettitt, fund manager for office and industrial property at USS.
"We will continue to seek well-let multi-unit industrial estates in strong locations."
Both acquisitions follow the purchase of a BHS store in Middlesbrough, England in March, and are likely to be the first of a number of UK investments made by USS.
The pension fund divested one-third of its directly held UK-only portfolio in 2006-07 and is looking to rebuild its exposure.
"I am now taking the opportunity to rebuild on a selective basis," said Graham Burnett, head of property at USS.
"Although there are risks, particularly in terms of the rental outlook, yields appear to be stabilising for prime stock in the UK. I am very pleased with the quality of the recent acquisitions and hope to announce more deals shortly," he added.