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LONDON-Somerfield, the struggling food retailer which has seen the departure of three top executives in recent weeks, has agreed a second sale and leaseback exercise. It has raised £21.4 million ($34 million) with the sale of its 330,000-sf national distribution centre in Wellingborough, Northamptonshire.

Under the terms of the deal with Royal & Sun Alliance Life and Pensions, Somerfield has agreed to lease the complex back for 25 years at an initial rent of $1.58 million ($2.5 million) per annum with five-yearly rent reviews. This equates to £4.75 ($7.50) per sf.

Last month Somerfield agreed a £37.6 million ($59 million) sale and leaseback deal with Prudential Assurance on a new distribution centre in Lea Green, St Helens, Merseyside. The 613,00-sf building will become the distribution hub for Somerfield’s discount subsidiary Kwik Save, and on completion in May 2003 Somerfield will pay a rent of £2.8 million ($4.4 million) per annum.

Somerfield executive chairman John von Spreckelsen said: “The sale and leaseback of the distribution centre at Wellingborough is our second successful sale and leaseback transaction in three weeks which together have released £59 million ($93 million) in cash for continuing investment in the business, in particular in the successful store refit programme.

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