Staples Corner Out-of-Town Shopping Sheds bought by Orchard Street Investment Management

"Orchard Street Investment Management LLP, the specialist commercial property investment manager, has acquired Staples Corner Shopping Park, London, from the Henderson UK Retail Warehouse Fund (HUKRWF) for c. £24.4 million, reflecting a net initial yield of 5.66%. The purchase was made on behalf of St James’s Place property funds.

"Staples Corner provides 49,437 sq ft of modern retail space, and is currently let to a high quality line up of tenants, including Argos, Dwell, Hobbycraft, Maplin, Wren Kitchens and TK Maxx (trading as Homesense), at an average rent of £29.50 per sq ft. In addition, TK Maxx recently signed a ten year lease at £32.64 per sq ft and the Open A1 consent has been recently updated to include an allowance for food retailers.

"The retail park is in an excellent location on the A5 Edgware Road, adjacent to the junction of the North Circular and the M1 motorway.

"Commenting on the acquisition, Barney Rowe, Partner at Orchard Street, said:

"This is an excellent acquisition with a lot of potential for growth. Staples Corner’s strong location, close to the junction with the M1 and North Circular, [presumably mentioned to emphasise the sustainable public transport links] combined with its proximity to Brent Cross Shopping Centre and Brent Cross Retail Park, where rents are in excess of £50 per sq ft, provide plenty of impetus for rental growth. The recent addition of food retailing to the planning consent will provide even greater flexibility to the tenant mix."

"Michael Neal, Fund Manager of HUKRWF at Henderson added:

"The sale of Staples Corner Retail Park indicates the strength of demand that exists for well let and well located retail warehouse investments. The Fund has successfully completed its re-positioning strategy, taking the asset from a first generation retail park to a quality institutional product. Proceeds raised will be reinvested into the Funds extensive asset management pipeline."

"As a house, Henderson remains committed to the retail warehouse segment of the market, for which it forecasts strong returns as more and more retailers see the benefits of trading from prime shopping parks. Its UK Retail Warehouse Fund continues to perform strongly with a 3 year performance* figure of 19% against an estimated benchmark of 13.5%.

"Jones Lang LaSalle advised Orchard Street, and Morgan Williams advised Henderson Global Investors."

*post performance fees, as at September 30 2012