A Newcastle supermarket is under new ownership after being sold in a landmark £53.1m deal.
The Sainsbury's superstore in Heaton has been sold to Supermarket Income REIT Plc in the huge deal, believed to be the biggest to be revealed in the region this year.
Last year’s sale of Quorum business park for £32m to asset management group Shelborn coming close to the deal value.
NFU Mutual Insurance Society sold the store, which was Tyneside’s first Sainsbury’s superstore, as part of an 11-acre land deal to the London Stock Exchange-listed property investment fund.
The supermarket is the first North East acquisition for Supermarket Income REIT, which has snapped up the supermarket giant’s site as well as a neighbouring Peugeot dealership.
The site includes the 68,000sq ft supermarket with purpose-built online fulfilment docks, 420 parking spaces and a 12-pump petrol filling station.
It also includes three unoccupied commercial units, principally leased to car group Peugeot.
The superstore becomes Supermarket Income REIT’s first North East acquisition and its fifth Sainsbury’s, alongside stores in Ashford, Preston, Cheltenham and Hessle. The group also owns a number of prime Morrisons, Tesco and Waitrose properties around the UK.
The supermarket is being acquired with an unexpired lease term of 21 years with five-yearly, upward-only, RPI-linked rent reviews, with the next review due to take place in November 2021.
The real estate investment fund Supermarket Income REIT currently has 46 properties in its portfolio of which 20 are directly owned and 26 are owned through joint venture arrangements.
The deal comes five years after the site was sold to NFU for £44.5m by Newcastle property company Hanro, which originally developed the site.
The land was the base of the old Cremona toffee factory before it was snapped up by Minories Group, the company from which Hanro emerged in 1988.
Minories Garages had bought the land to build a motor dealership, and constructed a Presto supermarket on some of the land which was surplus to requirement.
Presto later became a Safeway, which in turn became Morrisons, and following a Competition Commission review the store was one of 52 around the UK which were taken over by Sainsbury’s.
Over time it has been transformed into the superstore it is today following four extensions overseen by the Newcastle developers.
Ben Green, a director of Atrato Capital, the REIT’s investment adviser, said: “This omnichannel Sainsbury’s store is an excellent addition to our growing portfolio.
“The property has strong underlying fundamentals with an attractive inflation-linked lease in excess of 20 years and provides asset management opportunities.”
