Korean investor inks UK’s largest retail warehouse deal of the year
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It is thought to be the biggest deal for a retail warehouse site so far this year and is the first time Korean investors have stepped into the UK retail sector.
The 195,000 sq ft shopping park called Gallagher off Junction 9 of the M6 is anchored by Next and Currys and includes major stores run by TK Maxx, Outfit, Mamas and Papas, Boots, Furniture Village, SCS, Harveys, M&S Simply Food, Oak Furniture Land, Sofology and Tapi as well as Costa, Burger King and Pizza Hut restaurants.
It has been sold by owner KKR, a global investment group, but its operating partner Quadrant Estates is being retained by the Koreans to run the site.
The new owner is a real estate fund managed by Korean asset manager KAIM and backed by South Korean banking giant Hana. Sangmin Lee, chief information officer of KAIM, said: “We are delighted to have acquired this asset, which offers our investors an attractive combination of secure income returns and longer term upside potential. We are attracted to it by its inherent strength evidenced by the retailers’ trading performance and location.
“We are looking forward to working with Quadrant as our local asset manager to secure the future performance of the park during our investment period. ”
The site was acquired by KKR and Quadrant Estates in 2014, bought in three deals totalling £123m.
“The site was acquired by KKR and Quadrant Estates in 2014, bought in three deals totalling £123m.”
Quadrant drew up plans for a major revamp of the site, merging three car parks into one, merging the Currys and PC World stores, developing new space including four new restaurants. It resulted in £17 million investment in the park over the last few years but attracted new tenants M&S, JD Sports, Sofology, DFS, Nando’s, Costa and Smash Burger, which in turn has seen a ‘significant’ increase in customers coming to the park.
Guillaume Cassou, head of European real estate at KKR, said “We backed a fundamentally good asset in need of repositioning and Quadrant implemented an intensive business plan over four years that has resulted in a great end product, which we have now sold to long term income-focussed capital. We were delighted to transact with Hana and KAIM on their first foray into the UK market.”
Christopher Daniel, founding partner at Quadrant Estates, said “We achieved exactly what we set out to do with the park. We created an asset that is now ranked by CACI as one of the top 10 in the country.”
Questions & Answers
Q.Which company previously owned the Gallagher shopping park before this recent sale?
Which company previously owned the Gallagher shopping park before this recent sale?
The Gallagher shopping park was previously owned by KKR, a global investment group. They acquired the site in 2014 through three separate deals, totalling an investment of £123 million.
Q.What improvements did Quadrant Estates oversee at the shopping park during KKR's ownership?
What improvements did Quadrant Estates oversee at the shopping park during KKR's ownership?
Quadrant Estates oversaw a £17 million investment, merging three car parks into one and consolidating the Currys and PC World stores. They also developed new retail space, including four new restaurants, attracting several new tenants to the park.
Q.Why were the Korean investors attracted to the Gallagher shopping park?
Why were the Korean investors attracted to the Gallagher shopping park?
KAIM stated they were attracted by the asset's inherent strength, evidenced by the retailers' trading performance and its location. They anticipate a combination of secure income returns and longer-term upside potential for their investors.
Q.Which specific retailers and restaurants are anchor tenants or have major stores at the Gallagher shopping park?
Which specific retailers and restaurants are anchor tenants or have major stores at the Gallagher shopping park?
Next and Currys are anchor tenants. Major stores include TK Maxx, Outfit, Mamas and Papas, Boots, Furniture Village, SCS, Harveys, M&S Simply Food, Oak Furniture Land, and Sofology. Costa, Burger King, and Pizza Hut are among the restaurants.
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