Asda price just the ticket for Nationwide

NATIONWIDE Pension Fund Trustees (Nationwide), advised by CBRE Capital Advisors, has struck a cut price ground rent deal for £9.7m at Asda’s 73,000 sq ft store at Farnworth near Bolton.

In a joint venture which included Bolton Council, the building’s headlease now includes
ground rental income contracted directly from Asda, with five yearly, RPI-linked rent reviews.

It was estimated the rent equated to about 20% of the open market rental value, offering significant income security.

It was Nationwide’s first acquisition into a planned £100m portfolio since it appointed CBRE.

Director of investment advisory with DBRE, John Englehart, said: “Our role is to acquire a portfolio of ground rent styled investments over time.
 
“They need to be well secured with good vacant possession value cover, have a minimum lease length of 40 years and if possible benefit from explicit RPI linkage.
 
“We knew that the Asda in Farnworth matched the Fund’s criteria perfectly and, during a competitive pre-auction period where we did all our due diligence up front, were able to secure the transaction by offering and exchanging on the same day.”