Schroders, Zurich Investment Foundation invest in retail warehouse

Schroders has teamed up with the Zurich Investment Foundation to buy a GBP162m (EUR188.6m) UK retail warehouse and leisure scheme. The Schroder UK Real Estate Fund (SREF) has agreed a 50:50 partnership with Immobilien Europa Direkt, Zurich Investment Foundation's investment vehicle managed by Schroders Capital[1], to acquire The Brewery in Romford, Greater London. The Brewery comprises a 21-acre site with 545,478sqft of retail and leisure space anchored by national operators including a Sainsbury's superstore, Nuffield Health, The Range, Boots, Pure Gym and a 16-screen Vue Cinema.

The Brewery also offers longer-term alternative use potential, being located within the Romford strategic development area. 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. "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, the head of UK retail, Schroders Capital, said: "We believe in retail assets that perform well for retailers. Our partnership approach to our retail tenants gives us strategic insight into how best to configure the physical real estate for optimal trading performance. "The pandemic has accelerated omnichannel retailing sales techniques, helping to secure physical real estate at the centre of a retailer's distribution network.

Well-positioned assets like The Brewery will continue to secure themselves as strategic retailing hubs for click & collect fulfilment and convenience destinations." Roger Hennig, fund manager for Zurich Investment Foundation Immobilien Europa Direkt, Schroders Capital, said: "This food anchored, retail warehouse and leisure scheme represents an attractive addition to the portfolio." Hennig said the asset provides a strong income yield and will further diversify the portfolio, which has now increased in value to over EUR1.5bn.

"The joint venture with the Schroder UK Real Estate Fund will ensure that both partners can capitalise on the significant retail and placemaking expertise of the Schroders team to deliver performance from the asset going forward."

To read the latest edition of the latest IPE Real Assets magazine click here[2]. 

References

  1. ^ Schroders Capital (hub.ipe.com)
  2. ^ IPE Real Assets magazine click here (realassets.ipe.com)