London & Stamford Property, owner of shopping centres and retail sites across the UK including Sheffield-based Meadowhall, has today completed the acquisition of Tesco’s distribution centre (DC) in Harlow, Essex.
Bought for £22.9 million and reflecting a property yield of 7.5 per cent, the 273,115 sq ft warehouse is leased by Tesco for another 12.5 years and is used as a distribution hub for its stores in London and the south-east.
The property company will add the DC to its existing South Eastern distribution assets, which are held in a joint venture with Green Park Investments, and the cash yield for the new site once leverage is applied is anticipated to be 12.07 per cent.
Raymond Mould, Chairman of London & Stamford Property, said: “This acquisition sits very well with London & Stamford’s existing distribution investment portfolio.
“It is a high quality asset offering an excellent cash yield combined with a secure tenant and in a prime location.”
Meanwhile Tesco confirmed to Retail Gazette last week that it is confident it will be approved planning permission later this year for a new DC in Reading on the site of a former Heineken brewery.
The new logistics hub, which would serve the south-west and part of the south-east of England, was given the backing by local people last month after proposals went on display at public exhibition in the town.
Maxine Crawford, Tesco Regional Corporate Affairs Manager, said: “We have had a lot of dialogue with the council and they are aware that there will be no massive change to the use of the grounds, so we’re confident this will get the go-ahead.”