Auto Chain, Grocer Close Sale-Leasebacks

Michelle Napoli is editor of Net Lease forum, from which this article is excerpted.

London—Two kinds of retailers sold properties in the UK via sale-leasebacks last month. In one transaction, GE Real Estate UK and Paradigm Real Estate Managers Ltd. acquired a portfolio of 148 automotive repair shop properties for 103.7 million British pounds or approximately US$203.17 million. In the other deal, the British Land Co. and Tesco PLC closed on the sale-leaseback of 21 properties, with a purchase price of 650 million British pounds, or approximately US$1.28 billion, marking their fourth property transaction together in about 10 years

The Kwik-Fit auto repair properties are located throughout the UK, many in town centers, and have been leased back on 25-year terms, with fixed rent increases in years five and 10. The investment has an initial net yield of 5.3%. The leases, GE Real Estate UK managing director Mike Bryant tells NET LEASE forum, are FRI or full repairing and insuring–essentially the UK equivalent of triple net.