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TH Real Estate sells prime Derby Retail Park for £57.3m

Kingsway Retail Park, Derby

TH Real Estate has sold Kingsway Retail Park in Derby to Orchard Street Investment Management (‘Orchard Street’) for £57.3m, reflecting a net initial yield of 5.75%. The asset was acquired on behalf of St James’s Place Property Unit Trust.

Kingsway Retail Park is the prime and dominant retail park in Derby, located two miles west of the city centre. Completed in 1995 and updated and reconfigured since, the 148,765 sq ft (13,820 sq m) open-air scheme is currently fully let to 16 prime retailer brands, including Next, TK Maxx and Marks & Spencer.

Derby is located in the very centre of England and benefits from excellent road, rail and transport links. The city and its surrounding areas have experienced uninterrupted population growth since 2001, which is forecast to continue, with a significant number of new homes under development to meet rising demand. Kingsway Retail Park’s location draws on a retail catchment of 800,000 people.

Mark Cruddas, Senior Portfolio and Investment Manager at TH Real Estate said: "The sale of Derby concludes the capital recycling initiative that commenced in Q4 2015 with the purchase of Borehamwood Shopping Park. Having completed the extensive business plan, the UK Retail Warehouse Fund was able to crystallise its profit and with the asset outperforming the benchmark."

Barney Rowe, Partner at Orchard Street, said: "Kingsway Retail Park is an excellent addition to our portfolio, demonstrating exceptionally strong trading performance in addition to resilient occupier demand. As the dominant retail park in the wider area, it benefits from a diverse range of high-quality tenants attracting a high level of footfall, whilst it also offers the longer-term potential to undertake asset management initiatives to enhance future growth."

TH Real Estate was advised by Morgan Williams. Orchard Street was advised by Savills.

TH Real Estate, an operating division of TIAA Global Asset Management, is one of the largest real estate investment managers in the world with $96bn in AUM. Managing a suite of nearly 80 funds and mandates spanning both debt and equity across diverse geographies, sectors, investment styles and vehicle types, the firm provides access to every aspect of real estate investing. With offices in 18 cities throughout the US, Europe and Asia Pacific, over 450 professionals and 60 years of investing experience, the platform offers deep local expertise coupled with a sophisticated global perspective. TH Real Estate’s investment, asset management and corporate strategies grow from a deep understanding of the structural trends that will shape the future of real estate and responsible investing beyond market cycles. This ‘Tomorrow’s World’ approach sits at the core of our investment process and business operations, informing our long-term view of real estate investments for the enduring benefit of both clients and society. COMP201600440

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