British Land and Tesco have sold their edge-of-town Weston Favell shopping centre in Northampton for £122m.
The 307,800 sq ft (28,595 sq m) centre has been sold by the Tesco British Land Property Partnership to private investor clients of Churston Heard at an initial yield of 4.75%. Morgan Williams and Jones Lang LaSalle acted for the partnership.
Tesco will continue to anchor the scheme with its 157,000 sq ft (14,585 sq m) store on a 22-year lease, where the rent rises in line with inflation. The rest of the centre is let mainly to national multiples and a range of local retailers.
Weston Favell was one of 12 properties which formed the original Tesco British Land Property Partnership in 1998. Since then, the two have extended the centre by 60,000 sq ft (5,575 sq m), added a petrol filling station and re-geared the Tesco lease.
‘This is an opportunistic sale which takes advantage of the current strong investment market for retail assets that are let to national retailers,’ said Neil Earp, Tesco’s property director. ‘It is consistent with our strategy of raising cash from our property portfolio whilst retaining operational flexibility.’
Tesco and British Land have three property joint ventures, with assets totalling £1.15bn as at 31 March 2006. The properties included four retail parks, four shopping centres and 13 Tesco stores.