A private investor has snapped up the freehold of a Wiltshire town centre property on the strength of its tenant.
Property consultancy Myddelton & Major successfully acted on behalf of the vendor to negotiate the sale in Mere, West Wiltshire at a guide price of £225,000.
The buyer, a private individual, was attracted by the strong tenant covenant offered by the Southern Co-operative Retailers Ltd.
Southern Co-operative Retailers Ltd uses the building for storage and office accommodation for its adjoining supermarket on a lease for the next 10 years until 2024.
A self-contained three-bedroom flat on the first floor also leased by Southern Co-operative Retail Ltd was included in the sale of the property at 8 The Square.
Dean Speer, a partner at Myddelton & Major, said: “The investor was attracted to this retail and residential property by its location and the strong tenant covenant offered by Southern Co-operative Retailers Ltd.
“Southern Co-operative Retailers Ltd’s lease began in February 2008 and runs for another 10 years until 2024.
“The lease is subject to four-yearly upwards only rent reviews and the current rent is £17,000 per annum exclusive, the sale reflects a net initial yield of 7.35%, assuming purchaser’s costs of 2.75%.
“This latest successful negotiation further demonstrates the continued strength of the property market, with the opportunities for increased yields and potential for capital growth in the long term.”
Southern Co-operative Retailers Ltd is a wholly owned subsidiary of The Southern Co-operative Ltd, whose turnover for the year ending January 2014 was £326m.
The buyer was a private investor client of Cowling & West.
At the heart of Mere, the property is in the town square opposite the Market Cross and Clock Tower.
Measuring 731 sq ft (67.91 sq m), the premises include a gated archway with a rear courtyard.
Other occupiers in the Square include pubs, a post office, hairdressers and restaurants.