London, United Kingdom: In a market where secure, long-dated income is getting harder to find, LaSalle Investment Management has landed a rare prize. The global real estate investment manager has acquired a Morrisons supermarket in Plymouth for €26m from an institutional investor, on behalf of an existing UK Custom Account client.
The purpose-built store comprises approximately 5,760 m² of lettable area and occupies a prominent six-acre site (about 2.4 hectares) on Outland Road, one of Plymouth's principal arterial routes. It is fully let to Morrisons on a lease with 21 years remaining and CPI-linked rent reviews. The store serves the largest exclusive supermarket catchment in Plymouth and ranks among Morrisons' strongest performing stores nationally.
Plymouth is one of the largest urban centres in the South West and is expected to benefit from significant investment in defence and infrastructure, supporting long-term economic activity and consumer spending. LaSalle's Strategy & Research analysis also indicates that the supermarket ranks in the top quartile nationally for location quality across all grocery operators. "This acquisition adds long-term, inflation-linked income to our client's portfolio at an attractive yield, whilst also being underpinned by a high-quality asset, dominant in its catchment and with strong underlying retailer trade. We continue to see compelling opportunities in the grocery sector, where established assets benefit from resilient consumer demand, limited new supply and strong trading fundamentals," said John Longworth, portfolio manager, UK Custom Accounts at LaSalle.
The deal reflects LaSalle's focus on high-quality assets that pair secure, inflation-linked income with strong real estate fundamentals. Opportunities to buy long-let supermarkets with dominant local positions remain relatively rare, at a time when investor demand for defensive income-generating assets is strong. "In a highly competitive market, sourcing high-quality grocery assets that combine secure income with attractive entry pricing is increasingly challenging. Plymouth's resilient economic outlook, combined with the store's extensive catchment, makes this supermarket a particularly compelling addition to our client's portfolio," added Chris House, senior transactions manager at LaSalle. JLL advised LaSalle on the purchase.
What the announcement leaves unsaid matters to investors and developers. The yield, the current rent and the seller's identity are not disclosed, so it is hard to judge how much of that "attractive" entry pricing is a genuine discount. On the headline figures, the price works out at roughly €4,500 per m² of lettable area, a calculation based on the purchase price and floor area. A six-acre site also raises a question that a 21-year lease only postpones: what is the long-term redevelopment or densification potential of the land, and how might it affect value when the lease eventually runs down?
People mentioned
- John Longworth, Portfolio Manager, UK Custom Accounts, LaSalle Investment Management
- Chris House, Senior Transactions Manager, LaSalle Investment Management
Companies mentioned
- LaSalle Investment Management, global real estate investment manager and buyer, a subsidiary of JLL
- Morrisons, supermarket operator and sole tenant of the store
- JLL, parent company of LaSalle and adviser to LaSalle on the purchase
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