M&G Real Estate’s Life Fund has appointed Knight Frank to sell the freehold for its Marks & Spencer flagship in Cardiff for £33.2m.
A deal at asking price would reflect a net initial yield of 4.5%, after purchaser’s costs. M&S has occupied the building, located at 72-76 Queen Street in the city centre, for more than 80 years.
The 119,241 sq ft store is let to M&S for a further 137.5 years. It has minimum contracted rental income of £221m to lease expiry; the current passing rent per annum is £1.61m.
The building comprises basement, ground and three upper floors, with M&S trading from ground, first and second floors.
Charlie Barke, head of retail capital markets at Knight Frank, said: “It is very rare to be selling an asset let for an unbroken term in excess of 100 years. Add in the superb location and desirable building – there is a lot to like about this.”
M&S is currently partway through a five-year turnaround. It recently outlined plans to accelerate its store closure programme, with up to 100 underperforming and secondary stores expected to close by the end of 2020.
The Cardiff store, which serves as the retailer’s main flagship location in Wales, does not fall into this category.
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