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InfraRed completes £77.3m Norwich mall buy

InfraRed Capital Partners has bought the Castle Mall shopping centre in Norwich from The Mall Fund for £77.3m, representing an initial yield of 7.8%, in a deal first revealed by CoStar News.

The Castle Mall comprises 371,000 sq ft of covered lettable space in 80 shop units with one of the main car parks in the city providing parking for 710 cars.

Tenants include TK Maxx, New Look, Boots and Argos as well as an eight-screen multiplex cinema let to Vue. Norwich ranks as the 10th UK retail market, according to retail analysts CACI, with a primary catchment exceeding an estimated 1m people.

InfraRed has been a long-standing investor in UK shopping centres having managed three specialist shopping centre funds between 1998 and 2006 and acquired and sold 20 shopping centres.

In 2011 it re-entered the UK shopping centre market, after an absence of five years, buying The Galleries in Bristol and in March it bought the St Johns Centre in Liverpool from Land Securities.

The Mall was owned by The Mall Fund, the specialist UK shopping centre fund which was founded by Capital & Regional in conjunction with co-manager Aviva Investors in 2002.

In January C&R increased its stake in the Mall Fund from 18.16% to 20.15% after buying units from clients of LaSalle Investment Management.

Last September, the fund sold two assets to F&C REIT - the 430,000 sq ft Cleveland Centre in Middlesbrough for £82m and the 170,000 sq ft Alhambra Centre in Barnsley for £26m - with £104m of the proceeds used to prepay down the securitised debt in an agency-issued CMBS.

The repayments were part of a deal struck with CMBS bondholders in July 2010 in exchange for an extension to the CMBS loan out to summer 2015.

Chris Huxtable, director at InfraRed, said: "The purchase of Castle Mall completes a hat-trick of shopping centre deals for us since we re-entered the UK shopping centre market at the beginning of 2011. This time, we have directed our investment into in the top-tier retailing cities and into large centres that are characterised by high footfall, affordable rents and strong retailer performance. This segment of the retail market has proved resilient in the current economic climate. We plan to add considerable value to the centres through additional investment.”

InfraRed has appointed the Hark Group as asset manager and Munroe K Asset Management as property manager and DTZ provided advisory services to InfraRed.  

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