The Crown Estate partners with Gingko Tree

The Crown Estate, which owns property on behalf of the Queen, has acquired the Fosse Park retail estate in Leicester for 345.5 million pounds in a joint venture with Gingko Tree Investment. The investment marks The Crown Estates biggest acquisition in its 254-year history and is part of the property group’s

strategy to strengthen its position as one of the UK’s leading owners of prime regional retail property. Known for its collection of assets across London’s West End, including Regent Street and St James’s, the group’s portfolio also includes 16 retail parks in places such as Newcastle, Aintree, Nottingham, Swansea, and Cheshire with a total capital value of over 1.2 billion pounds.

Its new venture with Chinese investor, Ginko Tree, will see both organisations taking a 50 percent stake in Fosse Park with The Crown Estate managing the asset on behalf of the partnership.

Commenting on the acquisition, James Cooksey, The Crown Estate's head of regional portfolio said: “Fosse Shopping Park is one of the best assets of its kind, combining a prime location, with both scale and opportunities to enhance performance through active management.

“At Fosse Park we intend to bring the same vision and progressive approach to management as we are known for across our regional retail holdings and in London’s West End.”

The Crown Estate acquires Fosse Park retail estate

Fosse Park is a sought after retail park, due to its proximately to the M1 motorway, its impressive 2,500 free parking spaces, as well as its selection of retailers, including Marks and Spencer, Gap, New Look, Next, River Island, and Clarks. It is also one of the largest retail parks in the country covering 560,000 square feet and it attracts more than eight million shoppers a year.

Property agents at JLL claim that Fosse Park has the potential to be a “retail powerhouse” while added that the retail park was an attractive asset to investors for due to fact it has an 84 percent shopper conversion rate, with shoppers spending 88 pounds on average during their 93 minute dwell time. Figures that could increase when Primark, which has agreed to lease a 74,000 square foot anchor unit, opens in the park.

Tim Vallance, head of retail and leisure at JLL, added: “It is the connectivity and strength of market fundamentals in particular that contribute to Fosse Park’s success and resilience. Real opportunities exist to further develop Fosse, to create increased critical mass and destination appeal and to provide a relevant retail and leisure offer that is aligned with changing consumer and retailer requirements.

“The Crown Estate has a strong track record of redefining retail places, typified by its transformation of the Regent Street and St. James Estates in London. With further investment to embed vitality, dynamism and proactivity at the core of Fosse Park’s design, The Crown will be able to produce a “retail power centre” for Central England.”

The deal also further underlines the appetite of Chinese investors to expand their real estate portfolios overseas, with overall Chinese outbound investment 17 percent higher in the first half of 2014 than over the same period of 2013 at 5.4 billion dollars, according to figures from JLL.

This is the latest acquisition partnership for The Crown Estate, which pays its profits directly to the Treasury, it recently bought a slice of Mayfair from the Church Commissioners for England with Norges Bank to add properties on Savile Row and Cork Street in London to its portfolio.

Image: Fosse Park