EUROPE - The Universities Superannuation Scheme (USS) and Metric Property Investments have bought a retail park in Bristol for £7.8m (€9.5m) as an investment set to yield more than 8%.

The investors acquired the retail park, Longwell Green, via their £150m joint venture Metric Income Plus Limited Partnership (MIPP) from Cordatus Partners, on behalf of the receivers to Castlemore Securities.

The retail park has open A1 (non-food) planning consent for 20,400 square feet of space across two units, and is located opposite Gallagher Shopping Park.

MIPP also exchanged leases with retailers DFS and Carpetright across the entire accommodation, generating a yield on cost of over 7.5%, the company said.

DFS has signed a new 20-year lease for 14,300 square feet at a rental of £429,000 a year with annual RPI rent reviews, while Carpetright has signed a new 15-year lease over 6,100 square feet at £183,000 a year.

The joint venture has also applied for planning permission for a new 2,500 square foot pod.

Valentine Beresford, investment director at Metric Property Investments, said: "Longwell Green represents another off-market acquisition for MIPP and further extends Metric's reach in Bristol, a strong institutional town.

"The new leases to DFS and Carpetright will generate an attractive yield on cost for MIPP of over 8% once the additional pod units in the car park have been constructed."

The £7.8m price is net of acquisition costs.

MIPP was advised by Harvey Spack Field, and Cordatus Partners by Edgerley Simpson Howe.

To date, MIPP has invested £33.9m net of acquisition costs in four schemes since the joint venture was forged at the end of last year.

Rents across the schemes average £16.30 per square foot, with an average unexpired lease term of 17.6 years, it said, adding that the portfolio has RPI/fixed uplift across 62% of its income.

USS and Metric Property Investments conceived the joint venture as a five-year project, with the vehicle investing in smaller, regional, out-of-town retail parks, as well as single retail units.

It was set up to target income-producing assets valued at between £2m and £20m.

Topics