- What Melford Capital progressing deal for Roaring Meg Retail Park, Stevenage
- Why Deal is understood to represent a significant discount on guide price
- What next It has redevelopment and repurposing potential
Melford Capital has entered advanced discussions to acquire Roaring Meg Retail Park in Stevenage from Aberdeen Standard Investments for in the region of £45m, representing a significant discount on the asset’s guide price, React News can reveal.
Melford is closing in on a deal for the park at a level around £20m below what it was initially marketed off, with Roaring Meg understood to have been brought out with a £65m price tag.
Around two years ago potential buyers had been mulling bids of over £100m for the asset, according to market sources.
The park’s fortune epitomises the restructuring that has taken place across large swathes of the retail sector which has been hit by tenant CVAs, falling rents, the rise of e-commerce and more recently by the impact of Covid-19.
Roaring Meg Retail Park, named after a cannon, used by the Earl of Northampton during the Civil War, is a 300,000 sqft retail park with key tenants including Toys R Us, Boots and Argos.
The park, which has a significant footprint, could lend itself to forms of redevelopment and re-purposing to boost capital values as it is situated around 30 miles from London. Melford, a value-oriented investor in UK real estate, says it has “particular expertise in turnarounds, development and special situations investing.”
Melford manages private equity real estate funds, investing capital on behalf of endowments, foundations and family offices.
Retail park market
Over £300m of sales in the retail park sector were put on ice in March as Covid-19 made both vendors and buyers take stock of the situation and UK entered ‘lockdown’. Orion Capital Managers also pulled out a £400m deal with Hammerson for a portfolio of retail park’s in April, walking away from £21m deposit in the process.
However, should Melford’s deal complete, it would be a welcome pricing barometer for the sector as coronavirus restrictions ease and a sign price discovery between vendors and buyers is beginning to align which could increase deal flow.
M&G recently sold Newcastle Shopping Park to Patrizia for £34.75m as it seeks to bolster the cash position of its flagship UK fund, reflecting a yield of around 7.75%. The fund manager had acquired the park for £46.25m in 2015.
Avison Young is acting on behalf of Melford Capital, while Cushman & Wakefield is understood to be advising Aberdeen Standard Investments.
All parties declined to comment
