The asset was originally acquired in October 2017 as part of the £71.8 million RT Warren portfolio and the new lease terms are reflective of the long term rental and capital growth opportunities originally identified by the Company and which are being captured through active asset management.
Aldi previously leased a 16,500 sq ft supermarket on the site from RT Warren on a lease expiring in August 2030 at a rental of £247,800 per annum. This existing lease has now been surrendered and a new 20 year lease has been agreed with the Company, which also now includes a small amount of additional land for car parking, until September 2038 without break at an increased rental of £291,000 per annum. A rent review will be undertaken every 5 years, based on the Retail Price Index with a collar of 1% and a cap of 2.75% which compounds annually.
The property will continue to be held as a long term investment by Palace Capital.
Neil Sinclair, Chief Executive of Palace Capital, commented: “When we acquired the RT Warren portfolio, which was the best portfolio we had seen in the UK property market for some time, we knew that it contained significant latent potential that we would be able to unlock with our asset management expertise, and this new deal is a strong example of that. We have increased our income and lease term to 20 years to a strong covenant which has a positive effect on the value of this property. We continue to actively asset manage the other properties within the RT Warren portfolio and look forward to updating the market on our progress in due course.”