Tesco store goes on market for £7.3m just two years after sale
A Tesco store in Co Londonderry is on the market for offers over £7.3m just two years after it was sold to a global investment firm for £6.26m.
The fast turnaround of the Limavady site follows the explosion in demand for office space as opposed to retail holdings.
Located on Main Street in the town, the 36,313 sq ft store is set on a 3.22-acre site, including 214 car parking spaces, and is fully let to Tesco on a 25-year lease expiring in 2031.
It was originally built by a private developer based in the area. But CBRE Global Investors bought the foodstore in 2012 and the complex is now back on the market with an estimated rental value of £485,436 per annum.
The new price reflects a net initial yield of 5% and an estimated revisionary yield of 6.30%.
The sale is being handled by BTW Shiells.
Gavin Elliott, director of capital markets with CBRE in Belfast, said the demand for office accommodation had exploded in recent months and that the firm recognised that the Tesco facility would sell quickly and profitably.
"Like many investors, CBRE Global Investors would currently have a lot of retail and with the surge in interest in offices in the last 12 months, they feel comfortable enough that Tesco in Limavady is a good retail asset which would sell quickly and profitably and free up funds for investment in office space.
"The office market is incredibly dynamic, nobody expected the market not only to stabilise, but to strengthen so quickly."
It has been widely reported that a lack of high-end office space is deterring investors from setting up or expanding in Northern Ireland.
Last year, CBRE warned that Northern Ireland faced being at a competitive disadvantage if action is not taken to provide more high-end office space.
Brian Lavery, the head of the Belfast office of CBRE, said action by the Executive such as the introduction of an enterprise zone was needed to maintain the supply of good premises for inward investors.
And a spate of recent investment announcements is expected to increase demand for office space, with business advisers EY expected to outgrow their Bedford Street offices.
Tesco also operates a 3,000 sq ft Express store and petrol station on the Broad Road on the outskirts of Limavady
Last October, Portadown-based developer Turkington Holdings sold a Tesco Extra in Newry to asset management company Scottish Widows Investment Partnership for £30m.
A few weeks later Turkington also announced the sale of its Tesco Extra in Craigavon for more than £23m.