The Fidelity UK Real Estate Fund has purchased two prime retail units on Edinburgh’s Princes Street in a £7.35m transaction.
Brokered by Knight Frank, the deal for 119 Princes Street represents a net initial yield of 5.4%. The property occupies a prime retail position, located between Castle Street and South Charlotte Street and was sold on behalf of NFU Mutual by CBRE.
Offering two modern retail units over basement and ground-floor levels, its tenants are a flagship outlet of jeweller H Samuel, and Card Factory. The upper floors with views of the Castle are occupied by Starbucks and were purchased by Fidelity International in March 2015 together with adjoining units.
Alison Puhar, director, UK Real Estate at Fidelity International said: “We have been very selective in our exposure to high street retail in the UK fund but this investment offered an opportunity to add to and simplify our holding in a location that is seeing good rental growth.”
Patrick Ford, Capital Markets partner at Knight Frank, said: “Investor appetite towards Edinburgh retail has grown significantly and the city’s fundamentals are strong. There is a relative discount that Edinburgh offers compared to other regional UK centres. With a number of new retail occupiers looking at Edinburgh for the first time and insatiable appetite for the city’s property, we would expect to see another strong year for investment after 2016’s ten-year high – retail could well lead the way.”
The Fidelity UK Real Estate Fund is aimed exclusively at institutional investors. It invests solely in the United Kingdom. Since its inception in 2008, the fund has outperformed the IPD UK PFI – All balanced Property Fund Index by 2.2%p.a. and has a GAV of £447.5m1.