Rosette, a London-based Sharia compliant merchant bank specialising in real estate, has purchased a Tesco Extra susupermarket and an accompanying retail parade in Oldham, Greater Manchester from Bowmer & Kirkland for around £50 mln (€57 mln).
The 149,000 ft2 (13,840 m2) property comprises a modern two-storey supermarket and convenience district centre constructed in 2008 for Tesco together with 900 car parking spaces. Over 90% of the income is secured against Tesco Stores with in excess of 16 years unexpired lease.
'The Tesco deal marks a great start to 2018 and continues our strong momentum in the commercial real estate sector,' said Sam Broadhead, Rosette's CEO.
'While we remain a relatively new entrant to the market having established the real estate division only two years ago, we are pleased with our achievements to date. We intend to build on this and, with a strong pipe line of deals across the market, we are confident in doing so.'
The lease to Tesco runs until February 2034 with no breaks, and benefits from five yearly rent reviews to the higher of 2.5% per annum compounded or uncapped RPI.
The property is the dominant town centre foodstore and the investment also includes a mix of national and local retailers and multiple opportunities for asset management to further enhance the properties, according to Rosette.
Transaction history
Rosette's latest transaction follows on from 2016’s £37 mln (€42 mln) House of Fraser deal and 2017’s Marks Spencer portfolio and Debenhams store purchases at £50 mln (€56 mln) and £15 mln (€17 mln) respectively.
To date, the real estate division, which was established in March 2016, has completed £150 mln (€169 mln) of acquisitions and transacted a further £100 mln (€113 mln) through its specialist real estate advisory arm.
'This deal, our fifth now, demonstrates our ability to source, secure and complete complex transactions while creating value for our investment partners,' said Adam Cavanagh, Rosette's head of real estate.
'We have built a strong track record and a name in the market as leader in the field of Sharia compliant real estate investment. We have ambitious plans for the year ahead and beyond in which we intend to continue to build our portfolio in the UK and enter the European markets. By 2020 our goal is to have £1 bn assets under management.'
'We completed this deal in a true partnership with our client, a Qatari based investment house and once again demonstrated our ability to deliver,' concluded head of business development Amr Kenawy.
Rosette Merchant Bank was advised by Montagu Evans.
Bowmer & Kirkland was advised by de Morgan & Co and Knight Frank.
