CBRE GI buys trio of M&S food stores for £28m

By Millie Alter - Wednesday, July 11, 2018 8:37

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CBRE Global Investors has bought a trio of M&S food stores in Greater London from WA Capital in an off-market deal for £28m, CoStar News can reveal.

All three M&S assets are freehold and were sold for a net initial yield of 3.5%.

The portfolio includes:

44/48 High Street, Beckenham

The town centre M&S is arranged over three levels with food sales space on the ground floor. The 23,207 sq ft asset is held on a full repairing and insuring lease expiring on 32 march 2027. The passing rent from September is £301,968 per anum with annual rental increases until expiry of 1.95%.

The estimated rental value (ERV) is £440,000 per annum and the lease expires in nine years. M&S has the further right to a further lease at open market rent for a term of 40 years from 1 April 2027, with five-yearly rent reviews. The tenant break clause is on the 31 march 2042. The food store has the potential to be redeveloped into a substantial residential scheme.

820/832 Finchley Road, NW11

This M&S food store is in North West London between Golders-Green and Hampstead Garden Suburb. The property comprises an in town convenience store totalling 22,254 sq ft.

The lease is subject to rental increases of 1.95% with no break option. The current rent is £401,807 per annum and the ERV is £556,350. On expiry of M&S’s lease in nine years’ time, the retailer has the right to a further lease at open market rent for a term of 40 years from 1 August with five-yearly rent reviews. The tenant break clause takes place on 31 March  2042.

There is the potential for a residential scheme on the carpark - an under croft car park or above the building itself.

185 High Street, Rickmansworth

The 20,547sq ft food store occupies a self-contained site at the western end of high street close to the town’s ring road system. The property comprises a purpose built food store with car parking for 64 cars. The annual rent is £306,463 and the building is let on a full repairing and insuring lease expiring 31 2027.

The lease is subject to annual rental increases of 1.95%, mirroring the other stores and the ERV is £462,500 per annum. On expiry of the lease in nine years’ time, M&S has the right to further lease at open market rent for a term of 40 years from 1 April 2027 with five-yearly rent reviews. There is a tenant break clause on 31 march 2042. The food store has the potential to be re-developed into a town centre site.

WA capital was advised by Kieran D Cotter; CBRE Global Investors was represented by Heywood and Partners.

malter@costar.co.uk

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