Cleveland Retail Park traded in portfolio deal

The Middlesbrough shopping destination is among seven retail parks bought by British Land from Brookfield for £441m.

The net initial yield for the deal is 6.7%.

British Land is to fund the acquisition through a proposed equity placing of around £300m, by way of an accelerated bookbuild offering, with the remainder of the consideration financed from existing cash and in-place facilities.

The listed property firm this year sold its 50% stake in Sheffield shopping centre Meadowhall for £360m as part of a drive toward retail parks as its primary retail focus.

Chief executive Simon Carter said: “The acquisition of this high quality portfolio builds upon our market leading position in retail parks. Parks remain the preferred format for retailers and we have deployed £711m of capital into this subsector since 1 April 2024.”

Cleveland Retail Park accounted for 12% of the overall deal value. The park is situated on Trunk Road seven minutes’ drive from Middlesbrough town centre, and has a well-established local catchment base, as outlined by BL.

The net operating income is £4.1m, reflecting £13.62 per sq ft, and the park has a weighted average unexpired lease term to break and expiry of 3.4 and 4.1 years respectively.

Anchored by M&S, the scheme is virtually fully occupied, at 98.8%.

Other occupiers include B&Q, Currys, JD, Matalan, Next, Pets at Home, The Gym Group and TK Maxx.

BL also provided a trading update ahead of its half-year results in November. Carter said: “The broader business also continues to trade well with a good level of leasing in the period and cost discipline underpinning our profit performance. We expect portfolio values to be marginally up for the half year, with continued ERV growth across the portfolio.”