Springkerse Retail Park was acquired in August 2021 for £21.85 million in an ‘off market’ transaction. The price reflected a net initial yield of 9.54%. The asset is the dominant retail park in Stirling and extends to 162,593 sq. ft. across 12 units. On acquisition it was let to 10 tenants, with B&Q the anchor. Other tenants included Wren Kitchens, DFS, Pets at Home and Halfords.
Our strategy was to reposition the asset by modernising the unit frontages with the aim of retaining existing tenants, attracting new ones and improving the rental tone of the park.
To achieve this the park needed to be more desirable to tenants. Whilst the previous owner had started to make improvements to the property, nothing had been done for several years and the park was showing its age and was looking decidedly down-at-heel.
During our ownership, we have upgraded three of the seven unit frontages, which has significantly improved the look of the park and has been instrumental in securing rents ahead of the business plan, and the independent valuer’s ERV. Plans are underway to upgrade the remaining frontages.
Since acquisition we have completed deals with Harry Corry, Pets at Home, Bensons for Beds and DFS. All these were existing tenants who have committed to the park, underscoring its credentials as a desirable trading location.
We have also placed unit 1A under offer to a national retailer, at a rent ahead of business plan. This unit had been vacant for 10-years and was put under offer once the tenant knew the frontage was being upgraded. This deal illustrates the importance of active asset management and understanding the needs of tenants.
There is still work to do to finalise the turn-around, but progress has been good and there are more deals to complete which will improve both the income stream and capital value of the asset.
Calum Bruce, Investment Manager, commented:
“The works to upgrade the frontages and deals agreed are testament to the Company’s investment strategy, the strength of the park, and our active approach to asset management. We are delighted with the improvements made to date and are confident that the remaining vacant unit will not be available for long.”