Record UK supermarket- leased property bought

[LONDON] Investors bought a record £1.8 billion (S$3.82 billion) of property leased to UK supermarket operators such as Tesco and J Sainsbury last year, 50 per cent more than in 2012, as they sought real estate with longer leases.

The total return, comprised of changes in real estate values and rental income, was 11 per cent last year, researcher Investment Property Databank (IPD) and broker Colliers International said in a report yesterday. That beat a 6.7 per cent total return from shopping malls and a 9.6 per cent return from outlets such as high-street shops, department stores and restaurants. Supermarket leases are almost twice as long as those for standard stores, the report said.

Real estate held by some of the UK's biggest supermarket chains including Wm Morrison Supermarkets is attracting private-equity firms and hedge funds after a 35 per cent gain over five years made the stores worth more than the companies that run them.