NFU Mutual acquires Newcastle retail and motor dealership investment

November 5, 2015

NFU Mutual Insurance Society, advised by HSM and GCW, has purchased the freehold investment of a Sainsbury’s supermarket and a Peugeot motor dealership in Benton Road, Newcastle Upon Tyne from Hanro Ltd for £44.5 million.

The properties are located on a prominent 10.4 acre site in Heaton, an affluent suburb two miles outside Newcastle city centre, and the purchase reflects a blended initial yield of 5% off a topped-up rental.

The Sainsbury’s supermarket was built in 2011 and comprises a 100,000 sq ft gross store, a petrol filling station and a 425 space car park. There are 26.2 years remaining on the lease and the current rent, which is RPI index linked at review, equates to £16.70 per sq ft.

The Peugeot motor dealership and separate car servicing facility trades as Robins & Day, has 11 years remaining on their leases which have the manufacturer’s covenant. The current rent for the car showroom, which is also linked to the RPI, is £15.60 per sq ft.

David Hidderley of NFU Mutual said: “This is a dominant retail and motor trade asset north of the River Tyne. It is located in a prominent position with a large affluent catchment. The mixed-use and RPI indexed rents offer an attractive initial yield off a conservative base.”

Adam Serfontein, Managing Director of Hanro Ltd said, “This site has formed a key part of Hanro Group’s portfolio for 25 years. The procurement and sale of this flagship development to a national Fund is a highly successful outcome. We are very proud of what has been achieved, particularly in attracting Sainsbury to their first superstore in the region.”

Knight Frank and Gavin Black & Co advised Hanro Ltd.

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