Hammerson has entered into exclusive talks to buy the Junction fund, for a price thought to be around £265m.

Property Week revealed last week that the retail REIT was the frontrunner to buy the portfolio, which will be the biggest deal in the out of town retail market since the downturn.

Hammerson is understood to be in talks on a deal which would reflect a yield of around 7%.

The purchase would involve Hammerson reinvesting some of the £518m proceeds from the sale of the bulk of its London office portfolio.

The closed-ended fund, which is owned by Area Property Partners, Aviva Investors, Capital & Regional and Hermes, had a book value of £288m in December.

The fund was formed in 2002 and terminates at the end of 2013. It is asset managed by Capital & Regional and fund managed by Area.

It comprises four retail parks: Telford Forges Retail Park, Thurrock Shopping Park, Imperial Park in Bristol, Abbotsinch Retail Park in Paisley, and the proposed 300,000 sq ft Oldbury Shopping Park retail development.

Cushman & Wakefield, Wilkinson Williams and Morgan Stanley are advising on the sale. Drivers Jonas Deloitte is advising Hammerson. All parties declined to comment.