DIY retailer Kingfisher has sold seven B&Q warehouse stores to British Land for £198m
The edge-of-town freehold stores, in Ashford, Bury, Exeter, Glasgow, Grimsby, Lincoln and North Shields, total almost 700,000 sq ft (65,032 sq m). They are let to B&Q on 20-year leases.
B&Q will pay rent monthly in advance, which will be increased annually in line with the retail prices index, subject to a cap. This will limit B&Q’s rental increases and protect the business from any increases above inflation.
B&Q is one of several key retailers, including Next, Boots and John Lewis, which is supporting a campaign by the British Retail Consortium calling for monthly rather than quarterly rents for all retailers.
The properties represent around 7% of Kingfisher’s total freehold and long-leasehold portfolio.
Terry Hartwell, group property director of Kingfisher, said: ‘Through this transaction, Kingfisher is taking advantage of the current buoyancy in the direct property investment market in the UK to finance its operational business at attractive rates going forward.
‘The proceeds of the transaction will be used to repay existing debt and to invest in Kingfisher’s worldwide store opening programme, including further freehold acquisition.’
British Land property investment director Bob Bowden said: ‘This purchase lies within our core out-of-town retail expertise and adds to our portfolio of index-linked leases in which we see value.’