By James Watson – 30th August 2018

Opus North, a leading Yorkshire property developer backed by Palmer Capital has successfully sold a Morrisons supermarket at Hillsborough Barracks in Sheffield to a supermarket Income REIT for £51.7m reflecting a net initial yield of 4.59%.

The site has been sold on behalf on the Palmer Capital Development Fund III, a programmatic venture with clients of CBRE Global Investment Partners (“CBRE GIP”).

The supermarket is located on an 8.4-acre site at the historic and prominent Hillsborough Barracks. It comprises an 113,000 sq. ft. Morrisons’ supermarket, approximately 860 parking spaces and a 12-pump petrol filling station.

It is let for a further 21 years with five-yearly, upward-only, RPI-linked rent reviews compounded annually.  The property was acquired as part of a portfolio of 2 supermarkets and 3 shopping centres from Morrisons in 2015.

Palmer Capital and Opus North were advised by Colliers International.

Andrew Duncan, Director at Opus North commented: “This has proved to be an excellent project and has allowed us to strengthen our asset management role, alongside our extensive development pipeline.

We have maximised the potential of the portfolio and believe that the return of confidence to the commercial property market in Yorkshire and the North West, despite the challenges posed by Brexit, has presented a number of excellent opportunities, which we look forward to taking”

Alex Bignell, Region Head of UK, CBRE Global Investment Partners said: “On behalf of our clients, we moved quickly to provide the funding necessary to acquire this investment opportunity in 2015 following its introduction by Opus North and Palmer Capital. The profit on the supermarket sale, and value uplift achieved to date on the retained shopping centre, have vindicated this decision. “