Orchard Street Investment Management, the specialist commercial property investment manager, has completed the acquisition of a Sainsbury’s supermarket on Stafford Road, Wallington, Surrey, on behalf of St. James’s Place UK PLC, from Legal & General Property for £35.03 million (approx. €42.34 million) The sale price represents a net initial yield of 4.25%.
The 60,400 ft² (approx. 5,611 m²) supermarket is let to J Sainsbury’s PLC on a 20 year lease. The lease has recently been regeared from open market review to RPI reviews at a new rent of £1,575,000 per annum (£26 psf), which will be subject to five yearly rent review increases in line with the retail price index with an uplift of between 1.0% and 4.0% compound per annum.
Barney Rowe, Partner at Orchard Street, commented: “The acquisition of this prime supermarket provides us with good exposure to inflation linked rental growth from a top quality covenant. This, combined with the asset’s excellent location in an affluent suburb of south London, underpins our confidence in the asset’s long term reversionary potential.”
Knight Frank acted for Orchard Street and CBRE acted on behalf of Legal & General Property.
Source: Orchard Street