Marks & Spencer has launched a sale of two of its UK distribution hubs.
The FTSE 100 listed retailer has appointed LSH to market for sale its 197,000-square-foot distribution centre in Tunbridge Wells on a vacant possession basis while its 190,000-square-foot Sheffield centre is being marketed as a sale-and-leaseback for three years.
The distribution centre at Colebrook Industrial Estate in Tunbridge Wells in Kent has immediate access to the A21 and A26 leading to the M25 and M20 respectively. LSH has attached a price to £23.83 million reflecting a capital value of £121 per square foot.
The site extends to 9.85 acres and full vacant possession will be available in December 2024. LSH says quoting rents in Kent are now in excess of £13 per square foot.
The Sheffield hub at 3 Brookdale Road will be fully leased to M&S with no break for three years. The guide price is £17.13 million, a net initial yield of 6.75%, and a capital value of £89 per square foot.
The site extends to 10.19 acres and produces a passing rent of £1,246,739 a year reflecting a rent of £6.50 per square foot.
For the year ending 30 March, Marks & Spencer reported an increase in adjusted pre-tax profit to £716.4 million, a rise of almost 60% year-on-foot.
The retail giant has been very active in upgrading and reshaping its real estate portfolio. In half-year results in November, M&S, which returned to the FTSE 100 in September, said progress on its turnaround strategy and major revamp of its estate was behind a 75% lift in profits which saw its share price soar.
M&S said it was accelerating its store rotation to create a "brand-enhancing, productive estate of around 180 full-line stores and 400 M&S-operated food stores in growth locations by full year 2028", from a base of 247 full-line stores.
The retailer launched a much-publicised rationalisation of its UK stores portfolio in 2016. Since 2019 it has been reworking its store estate as part of its "Never the Same Again" programme. It has closed stores that no longer work in terms of the space and location and opening better formatted new stores, rotating the estate by reworking full-line stores selling clothing, home and food and creating bigger food hallstores.
It has also closed older format distribution centres and open newer better adapted or located ones. For instance, Marks & Spencer opened a new national food distribution centre in Milton Keynes in 2022. The 365,000-square-foot facility is operated by XPO Logistics and supplies ambient M&S Food products to the South of England. It increased M&S Food’s ambient product capacity by up to 60%.