London REIT acquires County Durham retail unit in £7.5m deal

A London real estate trust has strengthened its portfolio with the multi-million pound acquisition of a retail unit in the North East.

LXi REIT has exchanged contracts on the pre-let forward funding acquisition of a Lidl foodstore in Barnard Castle in County Durham for £7.5m.

The 20,828 sq ft foodstore has been fully pre-let to Lidl on a 20-year lease (with a break at year 15), while the adjoining 15,000 sq ft unit has been fully pre-let as a discount store to Home Bargains on an unbroken 15-year lease.

Both leases are guaranteed by the top trading companies of the tenant groups, offering an average rent of £13 per sq ft, resulting in a capital cost of £209 per sq ft.

In a statement this morning, the trust commented: “The attractive pricing reflects the off-market, relationship-driven nature of the acquisition and the thinner market for forward funding pre-let assets in smaller lot sizes in the current climate.”

The acquisition comes as the trust announces the disposal of two portfolios of long-let social housing assets for a combined sum of £10.7m.

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