Prupim, the property arm of British life insurer Prudential, has confirmed it has purchased a £207mln (EUR 261mln) portfolio of six Tesco food stores on behalf of Prudential Annuities. The deal was alluded to initially in Tesco’s presentation of its preliminary results last week.
Prupim, the property arm of British life insurer Prudential, has confirmed it has purchased a £207mln (EUR 261mln) portfolio of six Tesco food stores on behalf of Prudential Annuities. The deal was alluded to initially in Tesco’s presentation of its preliminary results last week.
Prupim has purchased stores in Suffolk, Cambridgeshire, Surrey, Somerset, Hertfordshire, and Essex. Tesco is leasing back the properties for 20 years with annual rent reviews linked to the retail price index (RPI) and capped at 3.5% per annum with options to renew for up to a further 30 years. Tesco will continue to manage the portfolio.
Prupim said the deal arose from discussions held with Tesco on an exclusive basis.
Steffan Francis, Prupim’s director of institutional funds, commented: 'These assets provide long-term cashflows, rising broadly with inflation, with the added security of the underlying real estate. These types of assets are very attractive investments for our high lease value funds such as Prudential Retirement Income, Prudential Annuities and the M&G Secured Property Income Fund'. Prupim appointed GL Hearn as consultants and Morgan Williams acted for Tesco.
