Savills is marketing the opportunity to buy the freehold interest in Castle Quarter, Norwich, on behalf of joint LPA/Fixed Charge Receivers, CoStar News can reveal.
The international real estate adviser is seeking offers in excess of £23.55 million, which reflects a net initial yield of 10% and a capital value of £61 per square feet.
The social, leisure and lifestyle destination in the heart of the city centre is the dominant asset focused on a catchment of 350,000 customers within a 20-minute drivetime. The site generates a net operating income of £2.5 million per annum and comprises 385,158 square feet across five levels. It includes 75 retail and leisure operators, anchored by tenants including TK Maxx, Superbowl and Vue. Additionally, its 791 parking spaces, spread over three levels, contribute 42% of gross income and generates £1.5 million in net operating income.
Castle Quarter has a weighted average unexpired lease term of 9.24 years, well above the sector average, following a recent 20 year lease regear with Vue Cinema, which accounts for 12% of gross income.
Savills said the scheme presents significant value-add asset management opportunities, which would unlock "lucrative revisionary potential", and has benefitted from significant ESG focussed recent investment including over £200,000 on rooftop solar power.
Toby Ogilvie Smals, Director in Retail Investment at Savills, said in a statement: “The offering of Castle Quarter comes at an opportune moment in the UK retail investment market. Following a resurgence in confidence, investment volumes are recovering, with a notable desire to capitalise on record-high yields. Castle Quarter, with its prime location and secure income, aligns well with this trend, offering investors a rare opportunity to acquire a high-quality asset as yields harden in anticipation of future interest rate cuts.”
InfraRed Capital Partners bought the Castle Mall Shopping Centre in Norwich from The Mall Fund joint venture between Capital & Regional and Aviva Investors for £77.3 million representing an initial yield of 7.8% in 2012.