AXA Real Estate Investment Managers ("AXA Real Estate"), the leading real estate portfolio and asset manager in Europe, with over 43 billion of assets under management as at September 2012, announces that it has made the first acquisitions on behalf of the recently launched UK Long Lease Property Fund (the "Fund"), with the purchase of two supermarkets for around £38 million (approx. 45.4 million) in aggregate.
The Fund has acquired a supermarket let to Waitrose on the High Street in Sevenoaks, Kent, for £11.5 million (approx. 13.7 million), and a 56,800 ft² (approx. 5,200 m²) supermarket let to Tesco in Mickleover, Derby, for £26.3 million. (approx. 31.4 million).
The acquisitions, which come shortly after AXA Real Estate's launch of the new, open-ended UK Long Lease Property Fund, having raised an initial £125 million (approx. 149 million), are in line with Fund's strategy of building a core portfolio of UK long lease assets, with a focus on strong property fundamentals, by targeting investments across a range of sectors from traditional to more alternative assets. This strategy is expected to generate long term, stable income streams often with inflation indexation for institutional investors that are looking for investments with liability matching attributes, in particular pension schemes. AXA Real Estate is targeting a total fund size of around £1 billion (approx. 1.2 billion) in five years.
Waitrose Sevenoaks, Kent
AXA Real Estate has acquired a 44,230 ft² (approx. 4100 m²) supermarket on the High Steet in Sevenoaks, which is let to Waitrose on an unexpired lease term of over 27 years, for £11.5 million (approx. 13.7 million).
Tesco Mickleover, Derby
AXA Real Estate has also acquired a 56,800 ft² (approx. 5,300 m²) supermarket in Mickleover for £26.3 million (approx. 31.4 million) in an off-market sale and lease back agreement with Tesco. The property is let to Tesco on a new 25 year lease. DTZ acted for AXA Real Estate and Morgan Williams acted for Tesco.
John Osborn, Fund Manager UK Long Lease Property Fund at AXA Real Estate, commented: "To be able to announce the completion of two high quality acquisitions so shortly after the launch of the new fund demonstrates AXA Real Estate's ability to put its extensive transaction network in the UK to effective use in sourcing suitable investment opportunities for its clients.
Both of the assets we have acquired fit precisely into the Fund's strategy of investing in properties with strong property fundamentals that are capable of generating secure, long term income streams with rental uplifts.
"We have a strong pipeline of suitable investment opportunities across a broad range of sectors which we are currently assessing, while, in parallel, we continue to expand the Fund's investor base."