Sainsbury’s has stepped up plans to leave its long-term Southwark home by putting up for sale a development opportunity of more than 400,000 sq ft (37,160 sq m)
The giant retailer has put a £41m price-tag on the adjoining Rennie House and Wakefield House on Stamford Street, SE1, which it still occupies, but which are earmarked for redevelopment.
It will also sell the 23,900 sq ft (2,250 sq m) 19-23 Blackfriars Road, which Sainsburys lets to BT, for £9m, a net initial yield of 7.4%.
Rennie and Wakefield, which total 167,700 sq ft (15,579 sq m), would be subject to a four-year leaseback to Sainsbury’s, at £25 per sq ft (£269 per sq m).
Sainsbury’s architect, Wilkinson Eyre, has prepared schemes that could provide a redevelopment of over 400,000 sq ft (37,160 sq m) upon lease expiry.
The eventual buyer will have to pay Sainsburys £50 for each sq ft (£538 per sq m) over 300,000 sq ft (27,900 sq m) it manages to develop.
The sale confirms speculation that the supermarket retailer has scrapped plans to move back to Southwark in favour of its new head office at Holborn Place, WC1.
In July, Sainsbury’s launched the preletting campaign for a second redevelopment, of its former Stamford House HQ, rather than opting to occupy the redevelopment itself.
The 380,000 sq ft (35,300 sq m) scheme has been designed by Foster & Partners.
Sainsbury’s property arm, J Sainsbury Developments, is pushing forward with the scheme, but speculation is mounting that it will eventually look to sell it for anything up to £300m.
A source said Sainsbury’s chief executive Sir Peter Davis was a “big fan” of Holborn from his days at Prudential.
He added: “Sainsbury’s does not occupy 19 Blackfriars Road, and the Rennie and Wakefield site will become surplus to requirements.”
In April, Cushman & Wakefield Healey & Baker lost the remit to advise Sainsburys to rival Jones Lang LaSalle (JLL).
The move was triggered partly by Sainsbury’s increasing frustration at the political wrangling over the future of its main point of contact at Cushman & Wakefield Healey & Baker, Craig McDonald, who is being forced to serve a 12-month notice period before joining CB Hillier Parker.
JLL declined to comment on the proposed sales.
EGi News 21/10/02
