Helical boosts income through GBP17m acquisition of Huddersfield Retail Park
Helical Bar has completed the acquisition of Huddersfield Retail Park, Beck Road in Huddersfield, West Yorkshire for GBP17m, a net initial yield of 7.2 per cent.
Circa GBP11m of the acquisition was funded through Helical’s credit facility with Barclays Bank with the remainder provided through existing cash resources. The property was sold by administrators at PWC appointed over Castlemore Securities and their real estate strategy for the site was worked up with Cordatus Real Estate and PWC’s real estate team.
The 96,977 sq ft property, which benefits from Open A1 planning consent, comprises two terraces of three units on a 6.5 acre site offering 304 car parking spaces. The Park is fully let to a strong selection of retailers including Matalan, Dunelm, Aldi and B&M on long leases (the weighted average unexpired lease term is 12 years without breaks, 10 years including breaks). Five of the six units were let between 2009 and 2012 and so the rents are low (an average of circa GBP13 per sq ft), offering opportunities for future rental growth. In addition, a number of the leases have fixed increases.
The acquisition is the third purchase by Helical within the last eight weeks, following the purchases of New Loom House and Maple House in London’s tech belt. This means the company has now invested circa GBP70m post its retail bond issue into opportunities where it expects good rental growth.
Jack Pitman, investment director at Helical Bar, says: “This was an opportunity to buy a well-let retail park let off low rents set during the recession. The 7.2 per cent yield provides a balance to the circa GBP53m of lower yielding central London assets Helical has bought over the summer.”
Matthew Hammond, partner at PWC, says: “Following wide marketing of this asset, we were pleased to generate a competitive bidding process with several institutional investors, generating an attractive price for the administration.”
Michael Cunningham, director at Cordatus, says: “The park was sold following completion of an asset management plan which included leasing 13,500 sq ft of vacant space, extending the principal lease on the park and extending the car park. We are delighted at the contribution these initiatives made to securing this sale.”
Wilkinson Williams advised Helical Bar and Edgerley Simpson Howe advised the vendor.