VC joint venture buys into retail property

A consortium of venture capitalists – Bank of Scotland Corporate Banking, Catalyst Capital and West Coast Capital – have joined forces and bought for an undisclosed sum a portfolio of retail properties worth £129.3m from Coal Pension Properties.

The joint venture will own a portfolio comprising five shopping centres located in Ashford, Wigan, Chesterfield, Durham and Wellingborough. A Catalyst Capital team led by the dealmakers Julian Newiss and Peter Kasch will manage the portfolio.

While the exact financial details have not been disclosed, Bank of Scotland takes a 47.5 per cent stake in the portfolio in return for investing debt and equity capital. West Coast takes 47.5 per cent with Catalyst securing the remainder.

The syndicate was drawn to the deal because the property sector is an area of good growth potential, said Donald Kerr, a director of the joint venture, who went on to cite recent research conducted by the Bank of Scotland. This research showed that historic retail rental growth in secondary towns such as Wigan and Durham had, in many cases, outstripped rental growth in prime retail property in city locations. He added that the group had already seen some initial market interest in the properties, which strengthened the research further.

Just yesterday, the joint ventures unit of Bank of Scotland Corporate Banking invested an undisclosed sum for a 42 per cent stake in Northern Venture Capital, a capital firm that enables builders to expand their businesses.

Since the unit was formed less than two years ago, it has amassed a portfolio of around 44 joint ventures worth around £2.9bn.