News, July 2010

Press release - B&Q, The Junction Portfolio lease Regear

B&Q have completed a major package deal with The Junction Retail Warehouse Fund ("The Junction") to reduce its rent roll by 10% on 4 large Warehouse stores trading at Bristol, Hull, Paisley and Swansea.

The deal provides B&Q with an immediate annual rent saving, totalling £603,000 with the average rent dropping from £14.55 psf to £13.09 psf. B&Q is the largest home improvement and garden centre retailer in the UK and currently has 330 stores. In return, The Junction have signed new leases extending to 20 years with 5 yearly upward only rent reviews linked to RPI capped at 3% pa. The Junction is a specialist retail warehouse fund owning and managing eight retail parks in the UK, with a total floorspace of approximately 2.5 million sq ft.

Iain Small, Director of Property at B&Q said: "We are pleased to have completed another group lease restructuring deal with one of our major landlords in which we achieve significant rent reductions to assist our company wide policy of driving down operating costs. It helps us achieve a better balance between open market and RPI linked reviews within our portfolio. The new leases are paid on a monthly basis which is a key requirement for us."

Jo Lord, Managing Director of The Junction said: "This deal secures B&Q's long term commitment to 4 of our largest retail parks where they are an important anchor tenant. B&Q occupy approximately 34% of total space within these parks and we have secured scope for further rental growth which is significant for our investors. It will help generate improved investment performance from these key assets."

Martin Supple, Out Of Town Retail Partner at Cushman & Wakefield who advised B&Q said: "This portfolio deal follows on from a number of lease regears that have been recently completed on their smaller format stores where overall rental concessions of up to 20% have been secured with a range of forward thinking landlords "