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Wednesday, January 10, 2024

Investream sells Darlington Shopping Centre for 84.5m

Investream, advised by Savills, has sold its Cornmill Shopping Centre in Darlington to Moorfield Real Estate Fund for 84.5m, reflecting a net initial yield of 5.25%.

The 221,066 sq ft shopping centre is the dominant retail scheme in Darlington and is anchored by a new 38,475 sq ft Primark store, which has contributed to a rise in footfall of over 19% in 2006. Other tenants include New Look, Bon Marche, Dorothy Perkins and TK Maxx as well as WHSmith, HMV and Clarks. The shopping centre has an adjoining 402 space multi-storey car park.

Nick Hart, head of shopping centre investment, says: "We predict that 2007 will continue in the vein of 2006 with strong demand for shopping centre assets. Yields have fallen to historic lows however we think that strong bidding will continue at the prime end, albeit with fewer parties bidding. There could be pressure on some of the more secondary assets where aggressive prices have been paid but with further retail development planned for some of these towns rental growth prospects could be dampened."

According to Savills' research, Q4 2006 was the strongest quarter of last year with shopping centre investment turnover at 2.6bn, bringing the total annual turnover to 7bn. The average deal size of the year was up on 2005 at 68m, with 21 deals at or above 100m and 26% of transactions at an average initial yield of less than 5%. Property companies were the biggest buyers and sellers of shopping centres in 2006, with private investors being the biggest net investors in the sector acquiring 2.1bn of investments.

DTZ acted for Moorfield Real Estate Fund.