Kenmore is to build a 205,000 sq ft distribution depot for supermarket giant Sainsbury’s at East Kilbride near Glasgow.
The developer has agreed a 17-year lease with the UK’s second largest supermarket chain at a rent of £4.75 per sq ft on a fixed uplift, following a rent review of £5.25 per sq ft at an adjacent facility.
Detailed planning for the scheme was granted by South Lanarkshire council on 29th March 2006.
However, the scheme was subsequently referred to the Scottish Executive because the council has an interest in the site and it is contrary to the local plan.
The Scottish ministers’ decision will be made known in 28 days, and if approved, work on the £16m depot could start as early as next month.
The scheme sits next to Sainsbury’s existing 350,000 sq ft Langlands Park distribution depot on the Kelvin Industrial Estate, which the supermarket opened in 1997.
The 17-year lease on the new facility reflects the unexpired term of the lease on the existing unit.
Andrew White, head of UK property at Kenmore, said: “This scheme will be developed as two buildings and has two separate planning consents.
“One of the consents is about a month behind the other but, with the level of employment it will bring to the area and the existing consent, I don’t anticipate any difficulties.”
The new facility will provide distribution and storage for chilled foods and will include a 55,000 sq ft Resource Recovery Centre for recycling packing and cardboard on site.
Sainsbury’s agent, Cushman & Wakefield’s Stuart Gibson, said: “Kenmore came up with the most cost effective proposals and convinced our client that it had the ability to work with a complex set of design constraints and could work well with Sainsbury’s design team.
“The terms of the lease were provided in advance of the developers evaluating the project.”
London-based agent Holley Blake acted for Kenmore.
References: EGi News 30/03/06
