CBRE Global Investors has completed the acquisition of the retail development at Southampton General Hospital for £11.5m, reflecting a net initial yield of 6.2% per annum. The seller is specialist healthcare property company, Prime, which developed the scheme with University Hospital Southampton NHS Foundation Trust (UHS) under its Commercial Estates Development Partnership. Griffiths Eccles acted for the purchaser.
The 20,000 sq ft property is a redevelopment of the hospital entrance and retail mall to create a welcome centre that serves as the main hospital reception and seven retail units totaling 11,900 sq ft. The development was recently completed and the retailers are now trading.
Brands in the retail mall include M&S Simply Food, Costa, WH Smith, Subway, The Stock Shop and an M&S Café. The majority of the retailers will be operated by Compass Group UK & Ireland, part of the UK’s largest food services provider. The property is held on leasehold from UHS.
The property is part of one of the UK’s largest hospitals two miles to the north of Southampton city centre in the Shirley area. It receives a footfall of approximately seven million people a year. This includes staff of around 10,500, and over 740,000 patients annually, as well as over 120,000 emergency visits.
James Horgan, said, “This acquisition fits into our strategy of acquiring ‘high lease value’ investments, with our clients wanting to invest in properties providing long-term inflation-linked income streams let to strong covenants. We are delighted to have secured this opportunity which will help to deliver a predictable cashflow to our client whilst enabling the hospital to improve its retail offer and improve the patient, visitor and staff experience.
The seller, Prime, said, “We are delighted to have been able to bring these leading brands to the hospital. In doing so, we have provided greater quality and choice and transformed the main entrance to be fitting of the hospital’s reputation for excellence.”
