Legal & General Property (LGP) has acquired a Tesco supermarket in Newton-le-Willows, Merseyside on behalf of its Limited Price Inflatio Income Property fund. The deal marks the fund’s third acquisition, following the purchase of two Welsh government-let assets, and brings its total investment to over £40 mln, having already secured over £100 mln of commitments to the Fund in its first six months.
Legal & General Property (LGP) has acquired a Tesco supermarket in Newton-le-Willows, Merseyside on behalf of its Limited Price Inflatio Income Property fund. The deal marks the fund’s third acquisition, following the purchase of two Welsh government-let assets, and brings its total investment to over £40 mln, having already secured over £100 mln of commitments to the Fund in its first six months.
The fund, which was launched earlier this year, offers Defined Benefit pension schemes an innovative way to invest in property with secure, primarily government-backed, inflation-linked sources of income. The portfolio generates income yields well in excess of those from comparable asset classes such as index-linked gilts or social housing.
The Tesco supermarket was purchased from Liverpool Victoria for £13.7 million, bringing the portfolio’s income yield to just under 5% per annum. Let to Tesco on an unexpired lease term of 24 years, with annual RPI-linked uplifts at a minimum of 2% per annum, the property comprises 33,967 sq ft of retail and ancillary accommodation along with 172 parking spaces.
Located on the eastern boundary of Merseyside, the store benefits from a strong catchment area and excellent transport links. The deal follows the acquisition of two recently completed office buildings let to the Welsh Government on 25-year leases, located in Newport and Swansea, benefitting from annual RPI-linked uplifts with no upper limit.