US firm Fortress Investment Group has put a clutch of Marks & Spencer stores up for sale, priced at £70m.
Colliers and HP Four have been appointed to seek buyers for 17 UK stores, most of which are freehold interests. Fortress bought the properties in 2016 as part of a deal to acquire 76 stores for £450m from Topland.
A deal for the whole portfolio would represent an 11.3% net initial yield, assuming standard purchasers’ costs of circa 6.8%.
The portfolio has a total gross internal area of 908,717 sq ft and generates just over £8.4m per annum. Each shop has a “significant” portion of space dedicated to the retailer’s Foodhall concept. Although M&S remains the tenant, a few stores are unoccupied.
The portfolio has an average of 5.2 years unbroken to expiry, to March 2027. There is a restricted alienation clause and tenant option to renew for a further 40 years from expiry, with a break at year 15.
There are 1.95% fixed annual rent uplifts in September. M&S has fully paid its rent throughout the pandemic, according to marketing materials.
During the crucial festive trading period, the retailer posted an 18.6% rise in sales.
Colliers and HP Four declined to comment. Fortress did not respond to requests for comment.
The stores are located in:
- Andover
- Ayr
- Barnsley
- Barnstaple
- Barrow-In-Furness
- Blackburn
- Blackpool
- Carmarthen
- Dundee
- Kettering
- Kirkcaldy
- Kilmarnock
- Mansfield
- Neath
- Scarborough
- Wakefield
- Workington.
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