Henderson Global Investors (HGI) and the Canada Pension Plan Investment Board have signed an agreement to acquire Whitefriars Quarter shopping center in Canterbury, UK from Land Securities for £253 million ($518 million).
HGI’s Henderson UK Shopping Centre Fund and the CPP Investment Board have formed a 50/50 joint venture to acquire the site. CPP Investment Board has also invested £150 million in the fund, which holds interests in four other shopping centers in the UK including Bullring in Birmingham, Buchanan Galleries in Glasgow and Princes Quay in Hull. Created in 2004, the fund is targeting returns of over 10 percent, according to fund manager Myles White. The current size of the fund is £840 million, with a target size in excess of £1.5 billion. The minimum asset size is expected to be 500,000 sq ft.
The Canterbury shopping center, which has 600,000 sq. ft. of retail space, is anchored by its main tenants Fenwick and Marks & Spencer. Land Securities, the UK’s largest REIT, completed expansion and redevelopment of the property in 2005 and 2006.
Retail acquisitions in city centers have been increasingly in demand by investors. Apollo recently acquired a shopping center in Shropshire, UK, and earlier this month Capman purchased a retail complex in the city center of Turku, Finland. On the whole, retail property investment in Europe was up 77 percent in Europe in 2006, according to a January report by Jones Lang LaSalle. Some of the largest retail acquisitions from last year included Merrill Lynch’s acquisition of four shopping centers in Germany for approximately €710 million, Quinlan Private’s purchase of the Diagonal Mar shopping center in Barcelona for €300 million and GE Real Estate’s deal to buy a Polish hypermarket portfolio for €550 million.
Henderson Property, a unit of Henderson Global Investors, has over €11.7 billion of property funds managed across Europe. The firm has operations in Frankfurt, Milan, Paris and Amsterdam.