UK - Standard Life Investments has acquired a Tesco Extra Supermarket in Shrewsbury for its £1.85bn (€2.04bn) Pooled Property Pension Fund.
The acquisition, which was a sale-and-leaseback deal worth £46m at a net initial yield of 5%, follows Standard Life Investment's earlier purchase of a Tesco Extra store in January in Irlam.
It also follows a number of sale and leaseback deals carried out between Tesco and UK pension funds, including the Universities Superannuation Scheme, over the past two years.
Standard Life's Pooled Property Pension Fund, the largest balanced fund in the IPD Pooled Property Fund Index, will benefit from rental uplifts in line with the UK's retail price index (RPI) for 20 years.
"The RPI-linked nature and the length of the income, twinned with the strength of the Tesco plc covenant, offers the pension fund an extremely attractive investment in these times where there are still inherent risks to funds from tenant weakness," said fund manager Mike Hannigan.
"The fund has a policy of offering clients a highly diversified direct property exposure and the attraction of these two investments, with their security of income for long durations, fits well with the fund's objectives at this stage in the cycle."
The store is also one of the first built to Tesco's "eco" specification and is designed to have a low carbon footprint.
The store is constructed with a timber rather than a steel frame and employs a range of energy saving technologies, including solar panels.