Glasgow Asda store among property assets changing hands for £85m

An Asda store in Glasgow is among a string of grocery sector assets acquired by a property fund for £85 million.

Stock market listed LXi REIT, which is one of several quoted real estate investment trusts, said the store was one of seven separate acquisitions in the sector from six different developers/vendors following its £125m capital raise earlier this month.

The Asda store, which extends to some 50,000 square feet of selling space, was purpose-built for and is let to Asda.

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The fund noted: “The tenant’s commitment to the location is underlined by the fact that it has traded at this site since 1998 and has recently extended its original lease by a further 20 years.

An Asda store in Glasgow is among seven grocery sector assets acquired by the property fund. Picture: Rui Vieira/PA Wire
An Asda store in Glasgow is among seven grocery sector assets acquired by the property fund. Picture: Rui Vieira/PA Wire

“The store provides online connectivity through both home delivery and click and collect and is dominant in its catchment area, with little competition.”

The other assets acquired are located in England and Wales.

Simon Lee, partner at LXI REIT Advisors, said: “Our focus on smaller lot-sized forward fundings and relationship driven deals with developers and tenants has ensured attractive entry pricing for these assets, despite them being in a much sought-after sector where the investment market is becoming increasingly competitive.

“We continue to believe that right-sized, well positioned grocery real estate assets let on sustainable rents to financially robust tenants, who are benefiting from flexible and proven operating models, and offering us as landlords very long, index linked, lease terms, remain attractive investments. Following these acquisitions, foodstores will be our largest sector exposure representing approximately 25 per cent of our portfolio by value.”

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