Completion of £27.67 million forward funding agreement at Bishop Auckland (UK)
Monday 26 October 2009
|Terrace Hill Group plc (AIM: THG), a leading UK property development and investment group, announces that it has completed a forward funding agreement with Aviva Investors Pensions Limited for the development and sale of the 92,333 ft² (approx. 8,500 m²) Sainsbury’s food store at its retail and leisure scheme at Tindale Crescent, Bishop Auckland, County Durham.|
|The property has been pre-let to Sainsbury’s on a 25-year lease at an initial rent of £18/ft² (£1,661,994 per annum) and will be sold to Aviva for a total consideration of £27.67 million, reflecting a 5.7% net initial yield. It is anticipated that the Sainsbury’s store will commence trading by Christmas 2010, with construction starting in November 2009.|
Terrace Hill’s leisure and retail park at Tindale Crescent, will also include a new stadium for Bishop Auckland Football Club.
Commenting Philip Leech, Chief Executive of Terrace Hill, said: “We are delighted that Aviva is investing with us again having funded retail parks with the Group in the past. The price achieved reflects a strong appetite among investors for well let food store developments which should enhance the returns we expect from our pipeline of similar projects.
“Today’s announcement follows our recent sale to Sainsbury’s of a site for a 55,000 ft² food store and petrol station in Helston, Cornwall, and the acquisition, in joint venture, of Heaton Retail Park adjacent to a Sainsbury’s store in Manchester.”
Robert Walton, Head of UK Institutional Funds - Real Estate, Aviva Investors, said: “This acquisition marks the return of the Aviva Investors Pooled Property fund to the market as we look to acquire investments in a variety of sectors. We have a good relationship with the developer of the supermarket site, Terrace Hill, having worked with them previously on other projects. We see this funding as an opportunity to invest in a secure, well let investment with guaranteed rental uplift to a strong covenant in a favoured sector.”
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