Client: Bath and Wyrley Brook Retail Park

Close monitoring pays big dividends

The Glasgow/Catford deal referred to elsewhere in our case studies was originally intended to be a much larger £80m swap transaction between Arlington (selling a retail park) and the Church Commissioners (selling a prime high street retail block at 6-11 Union Street in Bath). However, unwilling to reduce its exposure to the retail warehousing sector, Arlington reduced the size of the swap.

Our investment team continued to monitor the Bath property, which was leasehold and one of the Church Commissioners’ largest assets. It was likely to be sold in the near future to rebalance its portfolio, but, prior to doing so, the Church wanted to acquire the freehold, creating a more marketable interest.

Using the original swap deal as inspiration, the Church swapped with CIN an industrial property in Bristol for the freehold in Bath. This deal crystallised its decision to sell Bath - let to tenants including WHSmith, Etam and Disney Store - on the open market.

The continued dialogue which took place between Arlington, the Church Commissioners and Gerald Eve throughout the period leading up to the Bath sale ultimately delivered the right result for Arlington, with the Church agreeing a sale to Arlington for £38.65m.

We further continued to monitor Arlington's retail requirement, resulting in the successful purchase of the Wyrley Brook Retail Park in Cannock for £20.5m. Tenants here included B&Q plc, Allied Carpets, Fitness First and Dreams plc, and the purchase yield of over 5.5% represents excellent value in a very competitive market, where yields have hardened.

These transactions clearly underline how thinking laterally and innovatively, maintaining strong relationships with clients and appreciating their requirements at all times are key ingredients to successful investment deals.