Royal London Asset Management has paid £40.6m for a foodstore and drive-thru restaurant investment in Stirling.
Located at Back O’Hill Road to the north of the city centre, the supermarket is the dominant foodstore in the city and let to Sainsbury’s for a further 23 years. The current annual rent of £1.62m reflects £18.50 per sq ft and is subject to five-yearly rent reviews linked to RPI.
The drive-thru unit is let to McDonald’s Restaurant until 2024 at a passing rent of £90,000pa which equates to an overall rent of just under £28 per sq ft.
The purchase price reflects a blended net initial yield in excess of 4.50%.
Michael Lawrence, Fund Manager at Royal London Asset Management, commented: “This is a first-class investment. The supermarket and drive-thru uses are highly complementary and offer long-dated income let to two of the strongest covenants available in the retail sector”.
James Watson, Head of Investment at Briant Champion Long – who advised jointly with Stewart Sheridan on the purchase – commented: “The investment sector for supermarkets remains robust and there is still a clear preference from investors for assets with indexed-linked income”.
Briant Champion Long and Sheridan Property Consultants advised RLAM. Cushman & Wakefield acted for the vendor, F&C REIT.
