Strategic property investment and sale and leaseback advice.
In-depth market knowledge of South Coast commercial property investment market.
Lease Negotiation Case Study - Southern Co-Operative Limited
11
convenience store properties, two portfolios
£6+
million
sale value across two portfolios
11
leases
negotiated at 15 years each, with 5-yearly upwards-only RPI linked rent reviews, capped and collared
Challenge
Vail Williams was appointed by longstanding client, Southern Co-operative, to provide strategic property advice to help release capital to be reinvested in other areas of the business.
Working with our client to understand their strategic business aims, our investment team proposed the sale and lease back of 11 convenience store properties across two portfolios in Hampshire.
How we helped
- Initially sold six Co-Op Convenience stores based across southern Hampshire for at a Net Initial Yield (NIY) of 5.25%.
- Subsequently worked with the client to complete the sale of a further five convenience stores in Hampshire for a better yield of just over 5%.
- Drawing on our market knowledge, we marketed the portfolios on a semi-exclusive basis
- Achieved the balance right between securing appropriate parties and generating demonstrable best price for the client.
- Identified a private investor who would pay the best price for both transactions, whom our client was also content with as a future landlord
- Negotiated both sale and leaseback transactions, drawing on the regional expertise of lease advisory team for rental values based to inform the leaseback agreements
- Our building consultancy team also completed schedules of condition for the leasebacks to protect our client from potential future repairing liabilities.
Vail Williams has become an invaluable business partner to Southern Co-op over the years. Their understanding of our strategic business aims, together with their knowledge of the south coast property market, has helped us to consolidate and diversify our investment portfolio, whilst investing in improved sustainability credentials of commercial properties.
Dan Bowyer, Head of Property, Southern Co-Operative Limited.
Results
- Secured sale and leaseback of all 11 properties across two portfolios for over £6 million, at an average NIY of just over 5%
- Each lease was negotiated at 15 years, with five-yearly RPI linked rental increases, capped and collared.
- Thanks to our investment, building consultancy and lease advisory expertise, our client was able to release capital to help diversity their commercial investment property as well as enabling them to invest in improving their buildings’ green credentials, in line with their Environmental, Social and Governance policy.
Get in touch
If you think you may need similar support to that described here, or you would simply want to have an informal chat with a member of our team to discuss your property needs, get in touch.
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