Legal & General Investment Management’s managed fund has bought a Tesco Extra supermarket in Yarrow Road, Poole, for £46.1m.
The fund bought the store from clients of Abrdn, with the deal reflecting a 7.75% net initial yield.
The 95,000 sq ft supermarket, together with 16-pump petrol filling station and 599 car parking spaces, is located next to Tower Leisure Park. It features a substantial click and collect facility, and 19 online fulfilment vans operate from the store.
The property is let to Tesco for a further seven years and the rent is subject to annual uplifts in line with RPI of 0-4%.
Rob Codling, senior fund manager at LGIM, who leads the managed fund, said: “This is a great acquisition for the fund, which we believe will provide a strong return for our investors. The store is well located and its prospects of continued high-performance, suits the long-term investment objectives of our clients.”
Mark Girling partner and supermarket investment specialist at Montagu Evans, which advised L&G on the deal, said: “The purchase is attractive to our client firstly due to the large, strategically located site at the centre of the Poole Bournemouth conurbation, secondly being a strong trading store for both physical and online sales and thirdly, having the benefit of a high-yielding, annually inflation-proofed income secured on the investment-grade credit of Tesco Stores Limited.”
Morgan Williams advised Abrdn.
Photo from LGIM
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