St Nicholas Gate Retail Park

REIT acquires out-of-town retail park for £12m

Custodian REIT has bought the St Nicholas Gate Retail Park in Carlisle from Possfund for £12.1m.

The park is made up of six retail warehouse units totalling 73,700 sq ft with 434 parking spaces, alongside a 34,750 sq ft Asda supermarket.

Occupiers include Asda, Halfords, Oak Furniture Land, Iceland, B&M and Poundland. Nearby retailers include B&Q, Pets at Home, Laura Ashley and Matalan.

The properties have a weighted average unexpired lease term to first break or expiry of just over eight years, and total passing rent of £900,000 a year, reflecting a net initial yield of 6.89%.

Commenting on the acquisition, Richard Shepherd-Cross, managing director of Custodian Capital, said: “We are pleased to have acquired these properties in one of Carlisle’s dominant out-of-town retail locations. The acquisition includes the freehold interest in an Asda supermarket which reverts to the company in 2038. We expect to witness strong valuation growth in this interest as the headlease shortens. Planning permission has been obtained for two additional units which could drive further valuation growth.”

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