Clothing and homeware retailer Next has sold three warehouses to a property investment firm as it gradually ramps up online sales during the coronavirus lockdown.
Aviva Investors paid £107 million for the warehouses, located in Yorkshire. They total over 110,000 square metres of floor space.
Next will now rent the warehouse space back from the firm.
Renos Booth, head of real estate long income at Aviva Investors, said: “We are pleased to have acquired these assets and to have agreed on a sale-and-leaseback arrangement with Next, allowing access to a robust portfolio of warehouses, with a high-quality tenant.
“We believe that the logistics sector will continue to be resilient in the longer-term, as retail firms enhance their distribution capabilities. Our expectation is that these types of assets will therefore be strong contributors to performance in our portfolio.”
The news comes after Next pared back its online operation in order to increase safety at its warehouses. According to the company’s own projections, as of 5 May it is at around 60% of its normal capacity.
The company closed its warehouses on 26 March in order to reduce the risk of employees being infected with COVID-19.
On 14 April, having reorganised its warehouses to increase safety, Next began shipping a limited number of items each day from its most in-demand categories, including childrenswear and small home items. Next said that once it had reached the number of orders it could safely ship each day it would shut down online sales and convert the store to browse-only until the following morning.
TK Maxx has also implemented a similar policy of limiting daily shipments.