The Schroders Capital UK Real Estate Fund (SCREF) team has announced another wave of retail leasing activity to take its portfolio to 93% let by ERV.
Among the leasing activity is a 15-year lease SCREF’s team has secured with UK pet supplies retailer Pets at Home for a 7,500 sq ft unit at its Winfrey Avenue Retail Park in Spalding, Lincolnshire.
Pets at Home will move into the former M&S and Carphone Warehouse at Winfrey Avenue Retail Park in the centre of Spalding, which is also home to leading occupiers B&Q and Iceland, taking the asset to 100% occupied.
The Fund also recently announced a series of new retail and F&B lettings at two of its larger retail assets in Bracknell and Romford. At The Lexicon in Bracknell the centre saw the opening of a new 40,000 sq ft flagship Sport Direct which will also feature sister brands USC, GAME and Evans Cycles. The new store will be located within Princess Square which recently underwent a £30m refurbishment as The Lexicon looks to continue its efforts of combining innovative retail, placemaking and regeneration to enhance Bracknell’s town centre.
The Lexicon also agreed a combined 22,041 sq ft of new lettings, which included a letting to popular Thai restaurant Giggling Squid and women’s clothing store Quiz, to take the asset to over 90% let.
Meanwhile, at The Brewery in Romford, SCREF’s team recently secured 18,907 sq ft of lettings to leading operators Turtle Bay, Wagamama and Five Guys, as well as a lease extension with Cosmo. The deals take The Brewery to 98% let by ERV following SCREF’s £162m acquisition of the scheme in January in partnership with Zurich Investment Foundation Immobilien Europa Direkt (IED, a Schroders Capital managed, pan-European strategy).
The significant retail leasing activity also includes the arrival of a McDonald’s drive-through at Turner Rise Retail Park in Colchester, alongside a re-gear with home furnishings retailer Dunelm for a c.30,000 sq ft unit on a 5-year reversionary lease. Furthemore, at SCREF’s mixed-use asset on Mile End Road, Central London, the Fund agreed a new 5-year reversionary lease with Sports Direct.
These lettings have taken SCREF’s retail portfolio to 93% let by ERV. The considerable experience and expertise of the wider Schroders Capital team have helped the Fund navigate the challenges which have been thrown at the retail market in recent years. The Schroders Capital team will now continue to identify further ways it can enhance SCREF’s portfolio of retail and leisure assets. Recent work has included new public realm investment at Mermaid Quay in Cardiff, as well as planned improvements at The Brewery to increase the number of electric vehicle charging points, add solar panels, and introduce better contactless payment for parking.
Both the lettings and the continued enhancement works put SCREF’s retail and leisure portfolio in a strong position at a time when Schroders Capital expects demand for retail park units to rise. The assets have proved popular with discount retailers, convience-led occupiers, as well as leisure tenants such as gyms and activity experiences. This is expected to increase rents and deliver strong and resilient returns for retail and leisure park investors.
Tom Woolven, Asset Manager in Schroders Capital’s Real Estate team, said: “Our retail and leisure portfolio benefits from being strategically located in strong locations across the UK. Our assets benefit from a good tenant mix ranging from discount retailers to popular and relevant leisure experiences which generate healthy footfall and attract new, complementary occupiers. The success of our portfolio is thanks to our team’s partnership and hospitality approach with our tenants which allows us to adapt our assets in order to improve our occupiers’ trading performance and tackle the challenges brought about by the pandemic and online shopping. With affordable rents and near full occupancy, our retail warehouse assets continue to create long term sustainable income growth and strong returns for SCREF investors.”