SLI bullish on growth after £18m retail park deal

STANDARD Life Investments (SLI) has bought an East Kilbride retail park for £18 million, in a further sign of renewed confidence in the property investment market.

The park – which includes Currys, PC World and Dreams stores – will be added to SLI's 230m UK property fund.

The fund's manager said further property purchases were on the horizon.

SLI bought the 58,000sq ft retail park from the Hercules Income Fund, a joint venture between British Land, Hermes and LaSalle Investment Management.

The park was built by DSG, which owns Currys and PC World, in 2005. SLI said the scheme had been purchased with a yield of 6.54 per cent and that a vacant unit on the site was covered by a rental guarantee from DSG until 2025.

Nigel Chapman, manager of SLI's fund, said: "This acquisition will provide an appealing source of income which is an attractive proposition given the current state of the property markets.

"The fund can now boast an average unexpired lease term in excess of 15 years, providing us with a good security of income from high-quality tenants. The fund's cash position will be reduced to just over 15 per cent and we are hopeful of securing additional investments in the near term.

"Investors continue to be attracted to UK property by the compelling yield it offers."