LGP acquires retail assets in Liverpool for EUR 23m

Legal & General Property (LGP) has purchased 46 Hanover Street and 51-57 Church Street in Liverpool from Grosvenor Developments for a total sum of about £20 mln (EUR 23 mln).

LGP has acquired the long leasehold interest in 46 Hanover Street, a Tesco superstore from Grosvenor for £7.95 mln, reflecting a net initial yield of 5.85%. The property is let to Tesco Stores for a term of 15 years expiring in June 2023, at an RPI-linked passing rent of £500,000 per annum. Simultaneously, LGP has completed the freehold purchase of 51-57 Church Street from Liverpool PSDA, a subsidiary of Grosvenor, for £11.45 mln, reflecting a net initial yield of 6.60%, reverting to 7.25% at the fifth year.

The former George Henry Lee department store is a Liverpool landmark. The sub-basement, basement, ground and first floor retail unit has been recently let to TJX UK for a term of 15 years, expiring in 24 December 2024, at a stepped rent starting at £800,000 per annum, and trades as designer outlet, TK Maxx. Upper parts of the building (comprising the second-seventh floors) are let to Grosvenor for a term of 250 years, at a peppercorn rent.

Charlie Walker, senior fund manager at Legal & General Property, commented: 'The market is proving highly competitive for assets of this quality. These investments have long leases over high quality retailing space in prime locations in the city. The recent transformation of Liverpool's retail core will undoubtedly help to drive returns over the medium term.'

Jackson Criss represented LGP and Mason Owen acted for Grosvenor.