Area Property Partners, a US private equity group, is to recapitalise the UK’s largest retail park fund, the £734m Junction fund, to help prevent it breaching the terms of its banking agreements.

The investment house, formerly called Apollo Real Estate, is in advanced talks to take the majority of a planned placing of units, thought to be valued at more than £65m. The placing is also open to the fund’s existing unit holders, including Aviva, Hermes and Capital & Regional, which is also its asset manager.

The Junction fund owns parks occupied by retailers such as B&Q, DSG, Home Retail Group, Comet and Wickes. Retail warehouses, normally clustered on large out-of-town parks, have been hard hit by the economic downturn, which has caused trouble for typical occupiers in the furniture, white goods and electricals sectors.

Financial Times