Legal & General Investment Management’s (LGIM’s) Managed Fund, headed by Rob Codling, Senior Fund Manager, have acquired Tesco Yarrow Road Poole from clients of abrdn for £46.1m. The transaction reflects an effective net initial yield of 7.75%. 

The 95,000 sq ft store, together with 16-pump petrol filling station and 599 car spaces, is accessibly located at the heart of the Poole Bournemouth conurbation, next to the destination Tower Leisure Park. 19 online fulfilment vans operate from the store and there is also a substantial click and collect facility. 

The entire property is let to Tesco Stores Ltd for a further seven years and the rent is subject to annual uplifts in line with RPI 0-4%.  

Rob Codling, Senior Fund Manager, LGIM said: “This is a great acquisition for the fund, which we believe will provide a strong return for our investors. The store is well located and its prospects of continued high-performance, suits the long-term investment objectives of our clients.”

Commenting on the transaction, Montagu Evans’ Partner and supermarket investment specialist Mark Girling said: “The purchase is attractive to our client firstly due to the well located and accessible site at the centre of the Poole Bournemouth conurbation, secondly being a strong trading store for both physical and online sales and thirdly, having the benefit of annual inflation proofed income secured on the investment grade credit of Tesco Stores Limited. This profile fulfils the client Fund’s income and fundamental asset quality requirements at the present time.”

abrdn was advised by Morgan Williams. Montagu Evans advised L&G.