Through its Apollo European Real Estate Fund III, AREA has paid £50m for a 40 per cent stake in The Junction Unit Trust which controls one of the UK’s biggest out-of-town portfolios. At the same time Aviva Investors, an existing Junction shareholder, has also invested a further £15m.

As part of the deal, the existing investors in the fund including Capital & Regional and Hermes will see their stakes in the fund diluted.

A new company controlled by AREA but including representatives from Aviva Investors, Capital & Regional and Hermes, will be formed to handle the strategic asset management of the portfolio, while Capital & Regional will continue as property manager, overseeing day-to-day management, leasing and development activity.

The new investment in The Junction will be used to reduce the fund’s debt burden and as working capital for portfolio improvements and marketing.

The Junction portfolio comprises 11 retail warehouse parks totaling more than 3m sq ft across UK, with major sites in Bristol, Hull, Swansea, Telford and Thurrock.

AREA managing partner, William Benjamin, said: “We are investing in a sector which, we believe, has been over-sold during the past year but is fundamentally sound and sustainable over the longer term.

“The properties are well located, well leased and diversified with good prospects for improvement through asset management. Together with our strong and experienced partners, we are confident that this will prove a highly fruitful partnership.”

• Aviva Investors has taken advantage of an upturn in market conditions with the sale of two prime retail parks
in Plymouth and Taunton. The 112,000-sq ft Marsh Mills Retail Park in Plymouth was sold to USS for £27.5m reflecting a 9.25 per cent yield. The 87,000-sq ft Taunton Retail Park was sold to BP Investment Management for £17.77m representing an initial yield of 9 per cent.

Montagu Evans and CWM acted for Aviva while Morgan Williams and Edgerley Simpson Howe & Partners represented the purchasers.