Hermes Real Estate Investment Management Limited (HREIML) has sold the Sainsbury’s in Brentwood to M&G Real Estate for GBP77.94m, representing a net initial yield of 4.05 per cent.
The 104,598 sq ft food superstore in the centre of Brentwood is let to Sainsbury’s Supermarkets Ltd for a further 25 years and is subject to annual rent reviews linked to RPI.
The property was refurbished in 2008, has parking for over 400 cars and has a catchment of around 300,000 people within a six mile radius.
Chris Taylor (pictured), chief executive of Hermes Real Estate Investment Management Limited, says: “We are focused on diversifying our portfolio both in the UK and increasingly overseas. As part of this we have actively sought to market strong assets at the optimum point in the market cycle. The sale of Brentwood is also consistent with our strategy of recycling capital from low yielding assets into higher yielding stock, which will benefit from our active management.”
Mark Mayfield, director, investment, M&G Real Estate says: “This superstore is located in an affluent catchment area, with little local competition, and is in the top ten per cent of Sainsbury’s stores. The lease is particularly attractive as the annual RPI linked increase collar of 1.5 to five per cent is not generally available on new leases, making it an unusually valuable cash flow.”
Jones Lang LaSalle acted on behalf of HREIML. M&G Real Estate was advised by GL Hearn.