Koreans/Roebuck backed by PGIM loan buy Tesco distribution hub for £71.40m

By Paul Norman - Friday, October 20, 2017 12:18

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NFU Mutual Insurance Society has sold the freehold interest in Tesco’s distribution Centre, Avonmouth for £71.40m to a consortium of South Korean institutional investors alongside Roebuck Asset Management.

The acquisition has been part financed by a senior loan from PGIM Real Estate. NFU Mutual had originally bought the asset from Tesco in 2011 for £51m.

The property comprises of 540,000 sq ft which was purpose built by the retailer in 2011. The warehouse was designed by Tesco in 2010, and is of strategic importance to the Tesco distribution network, serving 400 stores across the South West of England and South Wales. It is one of eight temperature controlled warehouses across the UK and one of five purpose built facilities.

This is the second deal Roebuck Asset Management, SEA Capital and PGIM Real Estate Finance have completed with South Korean investors and the first transaction was Accolade Park, which was acquired for £62m in May. Both assets were bought with a consortium of South Korean Institutional Investors advised by Samil PWC.

David Hidderley, Property Investment Fund Asset Manager at NFU Mutual, said: “The sale of Tesco Avonmouth to the Korean Consortium concludes this property asset strategy ahead of our original business plan. Demand remains high for industrial long term secure income for institutional and more recently international investors . NFU Mutual will look to reinvest the proceeds from this transaction.”

Hugh Macdonald-Brown, Director of Roebuck Asset Management, said: “We are delighted to have completed the second acquisition with our South Korean Investment partners. The purchase of Tesco’s temperature controlled warehouse offers an attractive cash yield due to the annual RPI rental increases in an increasingly competitive logistics investment market.”

Knight Frank acted for the vendor and Samil PwC and DLA Piper acted for the purchasers. SEA Capital advised the purchasers on the senior debt.


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