Roadside Retail Limited, a UK joint venture between Roadside Real Estate and Meadow Partners-managed Meadow Real Estate Fund VI fund, is investing £70m (€84m) to acquire a portfolio of stores from discount retailer chain Lidl.
The partnership created to acquire and develop UK-based roadside real estate assets has signed an agreement with Lidl Great Britain Limited to acquire the 12 stores in a forward funding deal.
Following an initial investment of £30m for the land value, Lidl will sell and leaseback each of the 12 newly constructed stores to the joint venture upon completion.
The anticipated completion dates for the stores range from late October 2024 to February 2025. The new stores will be subject to 25-year leases with annual indexation, commencing on 1 March 2025, the partnership said.
The latest transaction is the joint venture’s fourth and largest deal to date.
Charles Dickson, executive chairman of Roadside, said: ”This is a significant transaction for both Lidl and the joint venture, deploying a substantial portion of our joint venture’s targeted investment quantum into high-quality assets with a nationally recognised tenant under strong covenants.
“The Lidl portfolio is an excellent example of the joint venture’s strategy in action, rapidly providing targeted capital to enable tenant expansion whilst securing asset management fees and creating additional opportunities for income initiatives.”
Richard Taylor, chief development officer at Lidl GB, said: “This deal is just the latest example of how we’re continuing to expand our footprint across the country, ensuring that even more households can benefit from a Lidl store.”
Andrew McDaniel, founding partner at Meadow Partners, said: “The Lidl portfolio demonstrates the value of Roadside’s approach to asset selection and active management strategy and the resilient long-term returns available in this attractive sub-sector of the real estate market.
“We look forward to continuing to identify attractive opportunities to grow our partnership in the future.”
Todd Wu at Mishcon De Reya provided legal advice on the acquisition to the joint venture with George Trimmer at Savills providing investment advice.
Trimmer, associate, UK investment at Savills, said: “This is an opportunity to forward fund the construction of 12 supermarkets let to Lidl. The foodstores will be let on 25-year leases, which offers both stability and growth, providing a reliable long-term income stream with the added benefit of annual indexation.
“In addition, the sale and leaseback arrangement offers Lidl GB Limited an excellent opportunity to unlock capital, while retaining operational control.”
To read the latest IPE Real Assets magazine click here.
