The UK private equity real estate firm Brockton Capital has teamed up with specialist retail property investment firm Pradera to acquire retail parks in the UK, striking their first deal in the process.
The London-based private equity real estate firm, which is currently deploying its second real estate fund, and retail property specialist Pradera, said they would inject enough equity to assemble around £250 million (€300 million; $392 million) of existing assets with ‘solid income’.
The creation of a joint venture to buy retail parks could be seen as a risky ploy given the weakness of consumer spending in the UK. Tony Edgley, partner at Brockton, said: “We don't underestimate the seismic changes that are occurring in the retail sector nor the heightened risks, but ultimately, retailers will gravitate to affordable locations that deliver sustainable profits. Consumers will shop where the offer is modern, sympathetic, multi-channel and convenient. Stock selection is everything.”
He added: “Our partners in the Pradera team bring both an invaluable historical perspective on how the sector has evolved to its current generation of parks, but more importantly a clear view on the inevitable modernisation that needs to occur in the more ageing retail warehouse park stock.”
Neil Varnham, a director at Pradera, added: “Retail warehousing will prove to be one of the more resilient property sectors as it adapts and flexes to accommodate changing retailers requirements in the future.”
The partnership has completed its first acquisition, the 150,000 square foot Cardiff Gate Retail Park in the Welsh capital. Deutsche Postbank’s London Branch provided senior debt to the partnership, for that deal.