The freehold interest in the Castle Quarter retail and leisure scheme in Norwich has been put up for sale for £23.55m+ by the joint LPA/fixed charge receivers.
The sale price reflects a net initial yield of 10% and a capital value of £61/sq ft. The 385,158 sq ft city centre site has 75 leisure and retail tenants and is anchored by TK Maxx, Superbowl and Vue.
Castle Quarter has a weighted average unexpired lease term of 9.24 years and a 20-year lease regear was recently negotiated with Vue, which accounts for 12% of its gross income.
The scheme generates a net operating income of £2.5m per annum and its 791 parking spaces, spread over three levels, account for 42% of its gross income.
Castle Quarter presents significant value-add asset management opportunities, which would unlock lucrative revisionary potential.
Toby Ogilvie Smals, director in retail investment at Savills, which has been appointed to market the opportunity, said: “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.”
