Deals

TH Real Estate buys UK retail park for £93m

The London-based real estate management firm bought the retail site, located in the outskirts of the UK capital, from FTSE 100 retail REIT Hammerson, who retain an adjoining 1.1m sq ft development site.  

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TH Real Estate, the real estate management firm owned by TIAA, has acquired the Thurrock Shopping Park for £93 million ($136.3 million; €120.1 million) on behalf of the TIAA General Account.

Thurrock Shopping Park, which comprises 274,000 square feet of space, is home to 19 retail units with tenants including Gap, Nike and TK Maxx as well as 1,600 car parking spaces.

The site is located 20 miles east of central London and has a catchment of more than 875,000 within a 20-minute drive. The area is also home to Lakeside, one of the UK’s largest shopping parks.

David Turner, head of TIAA European Investment, said the deal continues TIAA’s strategy of focusing on “assets, sectors and geographies with long-term growth and risk-adjusted returns”.

“With its strong south east location, excellent tenant mix and economic fundamentals, Thurrock Shopping Park met the investment criteria of TIAA. The park offers the potential to add value through both short and long-term asset management initiatives,” he added.

The seller was Hammerson, the London-based retail property REIT, who will retain ownership of an adjoining 1.1 million square foot development site, which has planning consent for 320 residential units and 81,000 square feet of retail and leisure space.

A spokesman for the firm, who bought the asset for £64 million in 2012 as part of its Junction Fund portfolio, said the sale price represented a net initial yield of 5.3 per cent.

David Atkins, Hammerson’s chief executive officer, said: “This is a further step in our £300 million disposal programme, which highlights our continued focus on rotating Hammerson’s retail platform towards higher growth assets.

“Thurrock has shown excellent returns during our ownership and this transaction provides a good opportunity to crystalize a £26 million profit on cost with further upside expected from the retained development opportunity,” he added.

In March, TH Real Estate launched a €4 billion European core open-ended fund, targeting 42 “future-proof” cities across the continent.

While in January the firm purchased the central London building 60 Great Portland Street, also from the TIAA General Account, for £102 million.

TH Real Estate was advised by Morgan Williams, while Hammerson was unrepresented.