Orchard Street Investment Management (‘Orchard Street’), the specialist commercial property investment manager, has acquired Slough Retail Park in Slough, Berkshire from Benson Elliot, the UK-based pan-European private equity real estate fund manager, for a price in the region of £63 million. The acquisition was made on behalf of St. James’s Place UK Plc.
Slough Retail Park is the dominant furniture park in the local area, totalling 152,467 sq ft of accommodation across eight retail warehouse units with 546 on-site car parking spaces. The park is fully-occupied by high-quality tenants including DFS, The Range, Sofology, Wren Kitchens and Smyths Toys, providing a total rental income of £3,603,195 per annum, reflecting an average rent of £23.63 per sq ft. The asset has a WAULT of 6.4 years and occupies a substantial site totalling 9.7 acres (3.9 ha).
Asset management initiatives undertaken by Benson Elliot since their acquisition in 2016 following the EU referendum include growing the income by re-basing the rental tone across the park and implementing a modest capex programme to upgrade the park’s signage and create new façades across the existing units.
The retail park benefits from a prominent position adjacent to the A4 (Bath Road), 1.3 miles west of Slough town centre, within 1.2 miles of the M4 motorway and 7 miles of Heathrow Airport, drawing on a wide and affluent catchment. Slough is set to benefit from the arrival of Crossrail (The Elizabeth Line) in 2019, which will provide access to London’s West End in 30 minutes. In addition, Slough’s town centre is in the process of undergoing a major regeneration, with a £900m residential-led redevelopment of the Queensmere Observatory shopping centre and a £450m edge-of-town new commercial and residential district.
Barney Rowe, Partner at Orchard Street, commented:
“Slough has the fastest-growing population in the UK, an increasingly affluent South East catchment, connectivity to Crossrail from 2019, and major regeneration projects underway, all of which stand to benefit Slough Retail Park. The park is well-located and serves as the local area’s principal furniture destination, presenting a compelling investment proposition”.
James Jakeman, Partner at Benson Elliot, commented:
“During our period of ownership we have been able to deliver significant income and value improvement from an institutional asset that already boasted strong fundamentals. Following an off-market approach from Orchard Street, we decided to crystallise the value created through our pro-active management.”
Orchard Street was advised by Morgan Williams, whilst Benson Elliot was supported by Cube Real Estate.
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Orchard Street Investment Management
Established in 2004, Orchard Street Investment Management LLP is a leading specialist commercial property investment manager, focused on the UK market. It acts on behalf of institutional clients world-wide to advise on investing in and the active management of property assets, including industrial, retail warehouses, offices and shopping centres. Orchard Street currently has assets under management exceeding £5 billion.