ST. HELENS, UK—Valad Europe, the leading independent diversified real estate investment manager, has acquired a 68,351 square foot retail warehouse and restaurant for $12 million (£7M) at Chalon Way West, in the Merseyside town.

Representing a net initial yield of 7.65%, the purchase was made on behalf of its Valad European Diversified Fund. Spen Hill Developments Ltd, the wholly owned developer subsidiary of Tesco, was the vendor.

The asset comprises 63,351 sq ft of Retail Warehouse space let to home, leisure and garden retailer, The Range, on a 15 year lease, and a new 5,000 sq ft two-story McDonald's restaurant with drive thru on a 20 year lease. The site also includes ample car parking with more than 450 spaces.

Rob Howe, Valad Europe's head of UK real estate, commented: “With long-term, secure income and reversionary rent potential, Chalon Way West is a strong, high quality UK asset for the Fund. This is our sixth UK acquisition since launching VEDF last year and is in line with our strategy to target retail warehouse and office assets.”

Cheetham & Mortimer acted for Valad Europe while Mark Liell acted for Spen Hill.

The Valad European Diversified Fund launched with initial equity of $252 million (£150M) to invest and a total fund capacity of $631 million (£375M), employing leverage between 50 - 65%. The fund invests in Core Plus / Value Add assets in the UK and Germany with individual lot sizes between around $8 million to around $60 million (£5 - £35M). The Fund will also invest in small- to medium-sized portfolios.