Supermarket Income REIT has acquired a Tesco supermarket in Colchester, Essex from Standard Life Investments Long Lease Fund for £63 million (excluding acquisition costs) representing a net initial yield of 4.5%.
Developed in 1993, and extensively refurbished in 2011, this prominent 10 acre site is located in the populous suburb of Hythe. The site comprises a 54,300 sq ft net sales area supermarket, a 16-pump petrol filling station and 570 parking spaces. The store has several online fulfilment distribution docks supporting Tesco’s online grocery business across the region.
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It is being acquired with an unexpired lease term of 19 years, with annual, upwards only, RPI-linked rent reviews (subject to a 4.0% cap and a 0.0% floor).
“This Tesco store is a great addition to our growing portfolio of omnichannel stores with an attractive, long, index-linked lease in excess of 19 years. The property has strong underlying fundamentals and forms a key part of the Tesco online fulfilment network,” said Ben Green, Director of Atrato Capital Limited, the Investment Adviser to Supermarket Income REIT plc.