The Schroder UK Real Estate Fund (SREF) has announced it has partnered with Zurich Investment Foundation Immobilien Europa Direkt (IED) to acquire The Brewery, a prime supermarket anchored, retail warehouse and leisure scheme in Romford, Greater London for £162 million in a 50:50 joint venture.
The Brewery comprises a 21-acre site with 545,478 sq ft of retail and leisure space anchored by national operators including a Sainsbury’s superstore, Nuffield Health, The Range, Boots, Pure Gym, a 16-screen Vue Cinema and several food and beverage outlets including Wagamama, Starbucks and Costa Coffee. The scheme also benefits from 1,750 car parking spaces and strong sustainability credentials including BREEAM in-use accreditation.
The acquisition follows research from Schroders that retail park rents are expected to stabilise, with customer footfall at retail parks currently 3% ahead of pre-pandemic levels.
Schroders expects there will be continued demand for retail park units from discount retailers, convenience-led occupiers, gyms as well as coffee and ‘grab-and-go’ food chains.
Jessica Berney, fund manager for SREF, Schroders Capital, said: “The Brewery is a successful retail warehousing park which benefits from strong footfall and a good tenant mix that is weighted towards convenience and leisure occupiers in line with post-pandemic consumer demand. We will be working closely with local government planning teams to help enhance the site and this area of Romford.
“The asset offers an attractive initial yield for the fund and is in line with several of the fund’s objectives including growing income returns, increasing exposure in sectors expected to outperform, strengthening future capital performance potential, and improving the portfolio’s sustainability credentials.”
Harry Pickering, head of UK Retail at Schroders Capital, added: “The Brewery is an exciting opportunity, showcasing the best of what retail warehousing should be; well located, a strong trading performance, affordable rents and ample opportunities to perform asset management initiatives both in the short and longer term to create long term sustainable income growth and strong returns for SREF.”
HampsonWall, CSP, Montagu Evans and Stephenson Harwood acted for the joint venture on the acquisition.
