ING fund sells Chester Tesco for £32m

ING UK Real Estate Income Trust has sold a Tesco supermarket and two shops in Chester city centre to the retailer for £32m.

The sale of the 90,856 sq ft of retail space by the Guernsey registered, closed-ended investment firm reflects a net initial yield of 4.84%.

Michael Morris, ING fund manager, said: "The disposal of the Tesco supermarket to a special purchaser provided the company with a good opportunity to realise an attractive sale price. In common with other recent disposals, these transactions will in due course enable us to reduce the company's non-securitised borrowings and is consistent with our model to maximise income and improve our dividend cover."

The Frodsham Street asset was not linked to the delayed ING Northgate retail development threatened by rising costs in the credit crunch.