Supermarket warehouses are showing the first signs of becoming more valuable than normal supermarkets, yield figures have found.
Yield shows the income an asset generates per year, in the form of a percentage of the original price invested. A lower yield, therefore, can indicate that an asset is more valuable.
Savills letting agents researched the yields of the large supermarket warehouses which have been cropping up more and more recently, usually along the highways of the UK, and compared them to the yields of actual supermarkets.
These warehouses have “traditionally been unglamorous assets,” according to Peter Mallinder, investment director at Savills.
However, in June, the yield for prime food shops was 5.25 per cent, whereas the yield for grocery warehouses were 4.75 per cent. Towards the end of 2009, these figures were quite different, with the food stores having a 5 per cent yield, and warehouses a much higher 7.5 per cent yield.
With online retail growing at a pace of around 12 per cent per year, there is a definite move away from going out to the big supermarkets on a weekly basis, and people are buying online and having there groceries delivered to their doorsteps, which is where these warehouses come into play.
With the value of these ‘big box’ investments going up, they are attracting the eye of investors, who may have previously just considered them an “unglamorous” option.
