LONDON-Addington Capital has partnered with European Property Investors Special Opportunities, a fund co-advised by AEW Europe and Tristan Capital Partners, to purchase a three-site retail portfolio in the suburbs here for $235 million. The Sapphire Retail Portfolio is composed of three shopping centers at more than 1.1 million square feet.

The portfolio includes Charter Walk in Burnley, Queens Arcade in Cardiff (Wales) and Harvey Centre in Harlow. The more than 270 tenants generate almost $20 million per year.

A syndicate of banks led by Lloyd’s Banking Group, owner of the properties with the Reuben Bros., put the centers into receivership in August 2010. The three properties were reported to have been valued at more than $460 million. Grant Thornton was appointed as administrator and London & Associated Properties as asset manager.

Peter Mather, co-head of investment with AEW, said in a statement that the plan is to stabilize and lease up vacant space through a capitalization program. The size of the expenditure was not mentioned in the statement.

Martin Roberts with Addington said the firm hopes to continue investing with Episo, to possibly double the size of the investment portfolio in the next year. “Each of the centers has suffered from a lack of capital expenditure over the past few years and there is plenty that can be done to improve not only net income, but also the look and feel of the centers and the tenant mix,” he said in the statement. Visitors to the centers top at about 12 million per year, he says.

The retail market is competitive in the United Kingdom, Roberts said, with more than 40 centers available in the fourth quarter of 2010 all attracting multiple potential purchasers. “The market remains constrained by a lack of supply rather than any weakness in investor sentiment. It will be interesting to see whether the bank induced selling accelerates this year or continues to ebb and flow as in 2010. Our view is that the market can sustain a significantly higher level of supply before the availability of debt or weakening investor appetite leads to weaker pricing for the better secondary centers,” Roberts said in the statement.