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TH Real Estate completes off-market acquisition of Dalton Park Outlet Centre, County Durham

Dalton Park

Dalton Park Outlet Centre, County Durham, was acquired for £38m from Peveril Securities, on behalf of one of TH Real Estate’s UK Balanced Funds.

Dalton Park is the dominant outlet retail destination in the North East of England, with 160,000sq ft (c.15,000 sq m) of retail space anchored by Next, Marks & Spencer and Gap. This will be enhanced by an exciting Phase 2 development project that TH Real Estate has agreed to fund, which will provide an additional 135,000 sq ft (c.12,500 sq m) of retail and leisure accommodation. This new phase has been pre-let to Morrisons, Cineworld, KFC, Pizza Express, Prezzo and Frankie and Benny’s. The proposals also include a hotel and a pub.

The Phase 2 construction works will be carried out by Bowmer & Kirkland, with completion and opening scheduled for spring 2016.

TH Real Estate has appointed Realm to carry out full property asset management duties at the centre. This additional outlet centre brings Realm’s number of assets under management to 15, consisting of 3 million sq ft (c.270,000 sq m), with over 1,000 trading units. It continues Realm’s growth in the UK outlet sector, where it now has a 42% market share.

BNP Paribas and DTZ advised TH Real Estate in the acquisition. Knight Frank and De Morgan & Company acted for Peveril Securities.

Rob MacQueen, Senior Portfolio Manager at TH Real Estate said: We are delighted to have secured the acquisition of Dalton Park. It is the major outlet centre in the North East and our Phase 2 plans will give it further critical mass and regional status.”  

Colin Brooks, Managing Director at Realm said: “This is an excellent mandate for Realm from a new blue-chip client. We are looking forward to working with TH Real Estate, to grow the performance of the asset and ensure a smooth transition and handover of the Phase 2 next year.”

Alice Breheny, Global Co-Head of Research at TH Real Estate added: “Designer outlets have been one of the most widely misunderstood, but strongest performing, real estate sectors in Europe over the past decade and, relatively speaking, they thrived during the global economic downturn. Strong demand from international retailers means the occupier base is broadening and covenant quality is improving; likewise, the investor base is deepening. Constrained supply, coupled with growing demand, should see continued rental growth and a long-term structural improvement in investment pricing globally.”

TH Real Estate boasts a strong capability in global outlet mall investments. In the UK, it owns three assets in: Swindon, Bridgend and Cheshire. In Europe, TH Real Estate entered a strategic partnership with NEINVER earlier this year, to create a leading designer outlet platform in Europe, on behalf of its client TIAA-CREF. It also managed a European Outlet Mall Fund which comprises of eight assets across the continent, valued at c.€2.3bn. In Asia, it acts as investment advisor to ‘Silk Road Holdings’, the Singapore joint venture established to invest in and develop luxury designer outlet malls in China.

This article is intended solely for the use of professionals and is not for general public distribution.

Issued by Henderson Real Estate Asset Management Limited, 201 Bishopsgate, EC2M 3BN. Authorised and regulated by the Financial Conduct Authority. TH Real Estate is a name under which Henderson Real Estate Asset Management Limited provides investment products and services. The value of investments and any income will fluctuate (this may be partly be the result of exchange rate fluctuation) and investors may not get back e full amount invested. Where opinions have been expressed, they are based on current market conditions and are subject to change without notice.

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