British Land Sells B&Q DIY Store at Record Yield

icTeesside - March 22, 2006

British Land has sold a Teesside property for £29.2m in one of the North-East's biggest retail warehouse deals in recent years. The 122,000sq ft property, which is minutes from British Land's 340,000sq ft Teesside Retail Park between Stockton and Middlesbrough, was placed on the market in December with a guide price of £27.1m.

It is believed to have been sold to a London company which invests in property for wealthy Asian investors. The property is let on a 20-year lease to DIY chain B&Q which employs over 200 staff at the store - one of its largest in the UK.

The property has been sold with a rent review pencilled in for September 2006. It is expected the new landlord will be able to raise rents from their current level of £1.4m, or £11.74 per sq ft to £13.50 per sq ft rent. The selling price represents a 4.64% initial rental yield or 5.2% once the higher rent is achieved. The market for bulky good retail warehouses has run into head winds in the past 18 months in the wake of the housing slowdown and struggling performance from DIY companies. Sphere: Related Content