Factory outlets, shopping centres and retail park assets in deal frenzy

More than £600m of Retail assets were under offer this week as the retail investment market looks set to pick up following a slow first quarter.

In the biggest deal, Henderson Global Investors has placed a portfolio of designer factory outlets under offer at around £371m.

Henderson is proceeding with due diligence on the purchase of three designer outlets, among them Cheshire Oaks in Ellesmere Port, Cheshire, and Bridgend Designer Outlet in Wales.

The fund manager is in talks to buy the properties from a limited partnership comprising several UK institutions, including bp Pension Fund and Morley.

All three factory outlets are managed by McArthurGlen, which is likely to remain manager under Henderson, which already owns several factory outlets in Europe managed by McArthurGlen.

In the shopping centre market, Resolution is in talks to buy Wilson Bowden’s Eagles Meadow scheme in Wrexham for less than £90m, which is thought to reflect a yield of between 6.5%-7%.

In west London, the 275,000 sq ft Ealing Broadway Centre is under offer to a UK property company advised by Colliers CRE for around £175m.

CB Richard Ellis advised on the sale of Ealing and the factory outlets; Jones Lang LaSalle advises Wilson Bowden.

The shopping centre investment sector has been severely hit by the credit crunch. Knight Frank reports that only seven shopping centre assets changed hands in the first quarter of 2008 and the total so far this year of £276.35m is more than 70% lower than the first quarter of 2007, and 65% less than the fourth.

Several retail park assets are also under offer, while more than £100m of investments are set to come to the market this month.

Israeli investor Igal Ahouvi, advised by Barrs Freer Smith, is in talks with British Land on several purchases, including the Hercules Unit Trust-owned Colne Valley in watford for around £50m.

British Land is also set to sell its Crossfire portfolio, which comprises seven small retail parks, through Wilkinson Williams.

And Scottish Widows Investment Partnership has placed under offer a 50% stake in two RREEF retail park schemes: Talbot Green in Llantrisant, Glamorgan, and Greenwich in south-east London.

The number of deals is a sign that demand has picked up, although the market is still suffering from the lack of bank debt available.

Buyers reliant on debt will also be hit by the change in five-year swap rates this week. The rate has risen by 30 basis points to 5.3% from 5% last week.