A PRIVATE investor has snapped up the freehold of a town centre property on the strength of its tenant.

Property consultancy Myddelton & Major acted on behalf of the vendor to negotiate the sale in Mere at a guide price of £225,000.

The buyer, a private individual, was attracted by the strong tenant covenant offered by Southern Co-operative Retailers Ltd.

Southern Co-operative Retailers Ltd uses the building for storage and office accommodation for its adjoining supermarket on a lease which will run for the next ten years until 2024.

A self-contained, three-bedroom flat on the first floor also leased by Southern Co-operative Retail Ltd was also included in the sale of the property at 8 The Square.

Dean Speer, a partner at Myddelton & Major, said: “The lease is subject to four-yearly upwards only rent reviews and the current rent is £17,000 per annum exclusive, the sale reflects a net initial yield of 7.35 per cent, assuming purchaser’s costs of 2.75 per cent.”

Southern Co-operative Retail Ltd is a wholly owned subsidiary of The Southern Co-operative Ltd, whose turnover for the year ending January 2014 was £326m.

The buyer was a private investor client of Cowling & West.