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Commercial Property News
Tesco raise £605 million from commercial property sales
Tesco, the UK's largest retailer, said today it had raised a further £605 million in four sale-and-leaseback property deals.
The transactions mean the supermarket giant has raised nearly £2 billion since it set a target in 2006 of releasing £5 billion from its UK property portfolio by 2011 to fund future growth opportunities.
Last week Tesco announced plans to set up a wholesale cash-and-carry business in India; last year it opened stores in the United States; and last month it announced a big push into banking with a £950 million deal to buy out Royal Bank of Scotland from their finance joint venture.
Three of the deals were 100% sales to PRUPIM, LaSalle Investment Management and Canada Life. The fourth was a joint venture with the Universities Superannuation Scheme.
The deals included a total of 13 Tesco stores and a distribution centre.
All the properties have been leased back to Tesco on RPI (Retail Price Index) leases.
The lowest yield achieved on the stores was 4.88%, a favourable outcome given current property market conditions and with 10 year UK government bonds currently yielding 4.57%.
Latest data from the July UK Monthly Index from Investment Property Databank shows average UK commercial real estate yields have risen to 5.8% from 4.57% a year ago.
The transactions mean the supermarket giant has raised nearly £2 billion since it set a target in 2006 of releasing £5 billion from its UK property portfolio by 2011 to fund future growth opportunities.
Last week Tesco announced plans to set up a wholesale cash-and-carry business in India; last year it opened stores in the United States; and last month it announced a big push into banking with a £950 million deal to buy out Royal Bank of Scotland from their finance joint venture.
Three of the deals were 100% sales to PRUPIM, LaSalle Investment Management and Canada Life. The fourth was a joint venture with the Universities Superannuation Scheme.
The deals included a total of 13 Tesco stores and a distribution centre.
All the properties have been leased back to Tesco on RPI (Retail Price Index) leases.
The lowest yield achieved on the stores was 4.88%, a favourable outcome given current property market conditions and with 10 year UK government bonds currently yielding 4.57%.
Latest data from the July UK Monthly Index from Investment Property Databank shows average UK commercial real estate yields have risen to 5.8% from 4.57% a year ago.
Thu, 21st Aug 2008