By Karen Peattie

TWO retail properties occupied by Waitrose in Glasgow and East Dunbartonshire have been sold in a £23.2 million deal, signalling confidence in the Scottish commercial property market.

Avignon Capital, the European property investment firm and asset manager, advised by Savills, has acquired the prime properties – the Waitrose outlets at West Retail Park in Milngavie and in the Glasgow's west end – from Town Centres Securities.

The 36,594sqft Milngavie store is let until 2040 with a passing rent of £830,000 per annum. The second store, in Byres Road, totals 32,687sqft on a lease expiring in 2029. The current rent passing is £595,000 per annum.

Rod Leslie, director in the investment team at Savills Scotland, said the purchase represented Avignon Capital’s first foray into the supermarket sector. “Both properties have strong underlying fundamentals, let to a major food occupier offering certainty of income and growth combined with future asset management opportunities,” he said.

“In an environment characterised by zero interest rates, food stores such as these offering defensive income streams are highly sought after among investors who recognise the sector’s resilience throughout the ongoing Covid-19 pandemic.”

He added: “We are living in uncertain times but there are opportunities in sectors like food retail where stores have remained open. Some investors are looking to safer stock with long-dated income which was an attractive factor in the Waitrose deal.”

Last month, David Davidson, chair of property firm Cushman & Wakefield in Scotland, said more than £600m of commercial property investment stock has been withdrawn from sale or failed to find a buyer during the pandemic.

He said investment volumes for concluded sales in Scotland are running at 50 per cent of the 2019 total, when the market was affected by Brexit uncertainty and the General Election in the fourth quarter.

Town Centres Securities was advised by Sheridan Property Consultants.