Tesco face paying a hefty price for empty Chatteris store after committing to 25 year lease
- Credit: Archant
Tesco facing paying a hefty rent on their empty supermarket in Chatteris having signed up to a 25 year lease, it was confirmed today.
Private investors and funding from Barclays Bank enabled a private equity company to buy the £22million store in 2013 – and rent it back to Tesco on a 25 year term with increases linked to the Retail Prices Index.
The site was bought from the property company run by Manea based entrepreneur Richard Sears who had found the site and won permission for it in 2011.
As building got well under way, it was bought in 2013 by Osprey Equity Partners, a privately run real estate and development specialist who have funded similar supermarket stores in recent years.
Partner James Osprey confirmed today that Tesco were tenants of the Honeysome industrial estate supermarket in Chatteris and it would now be up to them to find a fresh tenant.
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If Tesco decide to break up the retail store into smaller units they will need to negotiate those changes with Osprey.
The private equity company bought the 46,177 sq ft supermarket in the summer of 2013 through a growth fund that attracted £9.1 million from what they termed “high net worth investors” with the balanced secured from Barclays Bank.
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Mr White said at the time of the Chatteris deal that his investors were “attracted to the UK food store sector by the 25 year plus, inflation-linked income from quality tenants”.
He said the forward funding structure “currently offers the rare opportunity to access these institutional quality assets at a discount to investment pricing. The high 5 per cent per annum RPI cap caught our eye on this asset”.