Orchard Street Investment Management has completed the acquisition of a Sainsbury’s supermarket on Stafford Road, Wallington, Surrey, on behalf of St James’s Place UK, for £35m – a 4.3% yield.
The 60,400 sq ft supermarket, which was sold by Legal & General Property, is let to J Sainsbury’s on a 20-year lease. The lease has recently been regeared from open market review to RPI reviews at a new rent of £1.6m pa (£26 psf), which will be subject to five-yearly rent review increases in line with the retail price index with an uplift of between 1 % and 4% compound pa.
Barney Rowe, partner at Orchard Street, said: “The acquisition of this prime supermarket provides us with good exposure to inflation-linked rental growth from a top quality covenant. This, combined with the asset’s excellent location in an affluent suburb of south London, underpins our confidence in the asset’s long term reversionary potential.”
Knight Frank acted for Orchard Street; CBRE acted on behalf of Legal & General Property.
