December 12 2013 Latest news:
Story by: JOHN ELWORTHY
Wednesday, August 28, 2013
A PRIVATE equity group announced tonight it had bought the rights to build and own a £22m Tesco superstore due to be built in Chatteris.
The surprise announcement adds increased certainty to a project that has been bogged down in details that have included building a pedestrian underpass and moving a water course.
Now Osprey Income and Growth 3 LP have revealed it has completed “the forward funding acquisition” of the supermarket which will be built off Fenland Way and north of the Honeysome Road Industrial Estate.
Osprey says the site – for which detailed consent was obtained by Fen entrepreneur Richard Sears of Harrier Developments of Manea- has been pre-let to Tesco Stores Limited on an unbroken 25 year lease, with rental uplifts index-linked to RPI.
An Osprey spokesman said: “The property will comprise a brand new, 46,177 sq ft supermarket, with a four pump petrol filling station and 310 car parking spaces. “Detailed planning consent is in place and construction is due to commence next month, with practical completion expected in summer 2014.”
Osprey Income and Growth 3 LP is a private investor fund arranged by Osprey Equity Partners. The project is being funded through £9.1 million of equity provided by “high net worth investors” and £12.2 million of debt secured from Barclays Bank PLC.
Cambridge Property Group will be developing the property. Morgan Williams acted for CPG and Knight Frank acted for Osprey.
Alex Munro, partner, Knight Frank retail team said: “We are delighted to have assisted Osprey in the acquisition of this outstanding asset - the dominant food store in the town leased to the UK’s largest retailer on a 25 year lease index linked to RPI. “Osprey’s understanding of the challenges of the development process has enabled their investors to secure a prime asset ahead of the competition.”
Osprey says the close of their Income and Growth 3 follows the successful closing of two similar Osprey food store funds: a £37 million, 98,000 sq ft Sainsbury’s food store in Sunderland which opened to the public in March 2013, and a £45 million, 110,000 sq ft Tesco food store in Rotherham, which will reach practical completion in October 2014 (Osprey Income and Growth 1 and 2, respectively).
John White, property director at Osprey Equity Partners, said: “Our investors are attracted to the UK food store sector by the 25 year plus, inflation-linked income from quality tenants and the forward funding structure currently offers the rare opportunity to access these institutional quality assets at a discount to investment pricing. The high 5% pa RPI cap caught our eye on this asset.”
Although some retailers opposed the store, Fenland Council gave Harrier permission both for this and another store in Station Road, Whittlesey. That site has been the subject of much controversy with Harrier competing, unsuccessfully, for a supermarket site for Tesco on Eastrea Road.
Sainsbury’s won permission for a store on an adjoining site although Harrier has appealed their refusal.