Fundraising - JANUARY 16, 2014

Henderson to continue marketing U.K. Shopping Centre fund

by Reg Clodfelter

Henderson Global Investors has decided to extend the marketing period on the UK Shopping Centre Fund past its previous target close of December 31, 2013. The fund initially closed in 2004, but re-opened for investment in 2012. There is currently no target close date, and sources have said it will continue to remain open for investment while opportunities exist. The fund has raised £592 million as of September 2013 and will continue raising funds as long as viable investment opportunities exist.

The core-plus fund will target U.K. retail properties that are prime and/or dominant within their city or regional catchment and have a minimum size of 300,000 square feet. Additionally, they must be well anchored by a major department store with fashion based tenant mix and good car parking or public transport access.

“Consumer spending since the GFC has become that much more selective, with strong competition between centres to attract footfall,” says Gemma Bradley, associate director, PR, property at Henderson. “Those assets with the best retailers, more diverse offering and a ‘leisure’ like attraction have weathered the downturn better than the wider market.

“This trend has been amplified by the dramatic rise in on-line sales in the UK, with has enabled retailers to dramatically consolidate the number of stores they need to service their customers, leaving fewer, but larger flagship stores in the better/most active (in terms of footfall & spending) shopping centres,” added Bradley. “These dominant malls have low vacancy and better retailer demand, and hence rental growth prospects.”

The fund has acquired four assets totaling 2.74 million square feet to date: Buchanan Galleries in Glasgow, Whitefriars in Canterbury, Bullring in Birmingham and St. James in Edinburgh. All four are prime U.K. shopping centres.

To date, the fund has 50 investors, all of which are institutional. The gearing potential is limited to 20 percent of GAV.

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