Fiera Real Estate gives green light for £72m Project Orange sale

Originally published by Chris Borland at React News.

A portfolio of three retail warehouses is being lined up for a £72.25m sale by owner Fiera Real Estate, React News can reveal.

Xprop has been instructed to lead the sale. It has been pitched off a net initial yield of 5.25%, although there is reversionary potential to unlock in 2024.

Codenamed Project Orange, the portfolio includes three single tenant retail warehouses that are let to B&Q.

Each asset has an unexpired lease term of 12 years, with the structure including five-yearly RPI-linked rent reviews that are capped at 3% per annum. There is a tenant renewal option upon expiry, too.

The properties, considered strong trading stores with the rents originally set by B&Q at low levels, previously formed part of a sale and leaseback portfolio Fiera purchased from B&Q.

Totalling 306,000 sq ft, the properties are located in Wednesbury, Birmingham; Cardiff; and Washington. Each property has low site coverage, with values underpinned by alternative uses.

Rupert Sheldon, head of core at Fiera Real Estate UK, said: “Our investors have seen strong, income backed returns from these prime, best in class assets since acquisition and now see an opportunity to crystalise business plan returns early while values in the wider market across other, non-real estate asset classes fall.”

B&Q is a subsidiary of Kingfisher Plc, listed on the London Stock Exchange and a constituent of the FTSE 100 Index. B&Q, which has had a strong two years, saw sales increasing by 12.8% to £4.18bn in its 2021/22 financial results. Ecommerce sales exploded 146% over a two-year window.