Sainsbury Completes £191 Million Sale Leaseback of Four UK Distribution Centers

Property Week - April 9, 2008

Sainsbury’s has completed a £191m sale and leaseback deal on four of its distribution depots.

The money raised by the deals will be invested back into the supermarket’s property portfolio.

The deals, tipped in Property Week (23.11.07), have now completed. The four sites are:

•Tamworth, 423,494 sq ft, sold to BAE Capital Pension Fund Trustees for £38.5m

•Stoke, 561,203 sq ft sold to Canada Life for £40m

•Haydock, 626,624 sq ft sold to clients of Mutual Finance for £42.7m

•Hams Hall, 783,344 sq ft sold to Christian Vision for £70.1m.

All four deals have been secured on 25 year leases to Sainsbury’s with an average yield of 5.74%.

The move forms part of Sainsbury’s plans to actively manage its estate to ensure it maximises the value of each property.

Peter Baguley, Sainsbury’s property director said: ‘These are great deals for us and demonstrate the attractiveness of the Sainsbury’s covenant as we have managed to secure competitive terms during a set of very difficult market conditions. ‘It also demonstrates our continued commitment to supporting our operating business through delivering the active property strategy we set out a year ago.’

He said that the supermarket was also looking at options for a number of its other sites, particularly at the potential for redevelopment.

He added: ‘Where we have done as much as we can with a site, we see no reason to hold it freehold – it’s a dry asset. We’ve found that there’s a hardcore of good demand for good assets – not as much as a year ago but it’s still there.’

Sainsbury’s were advised on the deal by Cushman & Wakefield. Kitchen LaFrenais Morgan advised BAE; Atisreal advised Canada Life; Morgan Williams advised Mutual Finance and CGBA advised Christian Vision. Sphere: Related Content