Standard Life Investments’ UK Property Fund acquisition

Standard Life Investments, one of the largest property investors in Europe, has announced its acquisition of the East Kilbride Retail Park, Howard Avenue, East Kilbride, on behalf of Standard Life Investments' UK Property Fund, for £18.145m.

Acquired from Hercules Income Fund (a joint venture between British Land, Hermes & LaSalle Investment Management), the retail park comprises four units developed in 2005 by DSG, providing a total lettable area of 58,119sq ft (5,400 sq.m). Purchased with a yield of 6.54%, the scheme is let to DSG Retail Ltd (t/a Currys and PC World) and Dreams, with a remaining unit (10,000 sq.ft) currently vacant and subject to rental guarantee from DSG Retail Ltd until 2025.

Standard Life Investments' £230m UK Property Fund is structured as an authorised property unit trust and invests directly in UK Commercial Property. It was originally launched in October 2005 for internal asset allocation purposes, otherwise being available to investors via Standard Life's off-shore bond and Irish unit-linked pension products. In August 2009, the Fund was opened to retail investors who are now able to access the Fund via Standard Life's and other major UK platforms.

Nigel Chapman, manager of the UK Property Fund, Standard Life Investments, 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 impressive average unexpired lease term in excess of 15 years providing us with a good security of income from some high quality tenants. Furthermore, the Fund's cash position will be reduced to just over 15% 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. I believe that our continued focus on well-located, quality assets let on longer leases to lower risk tenants will stand us in good stead."