West Midlands Pension Fund has bought the 462,746 sq ft Sainsbury's depot at Marsh Leys, Kempston. The lease runs to 24 March 2036 and the rent is up 22%.
The Sainsbury’s clothing distribution centre at Marsh Leys has a new owner. The West Midlands Pension Fund has bought the 462,746 sq ft depot on Woburn Road, Kempston.
CBRE Investment Management did the deal on the fund’s behalf. It was announced on Friday 18 September and is reported in the property trade press, which also carries the buyers’ own statements.
Nothing changes on the ground. Sainsbury’s is the tenant, not the owner, and it stays. What has been sold is the freehold and the rent that comes with it.
What has actually been bought
The building sits about three miles south-west of Bedford town centre, beside the A421, next to the Asda and Argos depots on the same estate.
Gerald Eve’s sale particulars from September 2020, when the building was last openly marketed, set out what it is:
- 462,746 sq ft, of which 9% is office space
- a site of about 22.5 acres, built on to 44% of its area
- developed by Gazeley in 2005, with 15 metre eaves, heating, lighting and sprinklers
- used as Sainsbury’s national centre for clothing distribution
- fitted out by the tenant with extensive racking and automated picking
The energy certificate for the building records a floor area of 42,054 square metres and an energy rating of B, with a score of 38. That certificate is valid until 18 February 2028.
The lease, and why the date matters
This is the part that matters locally, because it is the measure of how long Sainsbury’s is committed to the site.
The 2020 particulars record a lease to Sainsbury’s Supermarkets Ltd expiring on 15 February 2030, followed by a reversionary lease running to 24 March 2036. That is another nine and a half years from today.
The rent was £3,403,323 a year in 2020, about £7.35 per square foot. It is reviewed every five years, in line with RPI inflation, with a floor of 2% a year and a ceiling of 4%.
The last review was due on 16 February 2025. RPI rose 34.9% between February 2020 and February 2025, according to the ONS all items RPI series, while five years at the 4% cap allows only 21.7%. So the cap will have bitten. On the particulars’ own figures that puts the rent at £4,140,663 a year, or about £8.95 per square foot. The final review falls due on 16 February 2030.
The rent rose. The price did not.
In September 2020 the building was marketed at offers over £70,800,000, which is £153 per square foot and a 4.50% net initial yield.
It sold the following February to a fund managed by BlackRock Real Assets, which bought it from Legal and General. BlackRock said at the time that it paid £90.5 million.
Neither CBRE Investment Management nor the pension fund has put a figure on this week’s deal. CoStar reported the price as £67 million. We have not been able to confirm that with either party, so treat it as their figure rather than ours.
If it is right, the building has lost about a quarter of its value in five and a half years, and sold for less than it was asking in 2020, even though the rent it produces has gone up by more than a fifth. At £67 million the rent would represent a net initial yield of about 5.8%, against 4.50% in 2020.
In the announcement, Natalie Tanner of CBRE Investment Management put the purchase down to “continued conviction in the UK logistics sector, where supply remains constrained for well located, institutional quality assets despite broader market volatility”.
Who owns it now
The West Midlands Pension Fund is the local government pension scheme for the West Midlands, administered by City of Wolverhampton Council. Its 2024/25 annual report records:
- 363,311 members at 31 March 2025, of whom 130,092 were still paying in
- net assets of £21.8 billion
- a directly owned property portfolio valued at £1,147.3 million, up from £1,019.2 million the year before
So the landlord of the Marsh Leys depot is now the retirement savings of local government workers across the West Midlands.
The fund is not a stranger to this borough. The same report lists “Stagsden Land” among its directly owned agricultural holdings. Stagsden is about four miles west of Bedford.
Shiventa Sivanesan, the fund’s director of investment management and stewardship, said in the announcement that the purchase fits “our core philosophy of investing in high quality assets, backed by strong tenants that provide a reliable income stream to help meet our pension benefits”.
Ms Tanner said the depot “plays a critical role in Sainsbury’s supply chain operations”. She also pointed to “opportunities to further enhance its sustainability credentials over time”.
Solar panels are already on the roof
That last line is worth reading against the council’s planning register.
In December 2023 Sainsbury’s Supermarkets Ltd applied for prior approval for solar panels on the roof at Marsh Leys Farm, Woburn Road, with E.ON UK acting as its agent. The council decided on 1 February 2024 that its prior approval was not required, and the application record is reference 23/02668/SPNJ.
The register lists that application against Unit 2 on the estate. The unit numbering in the register is inconsistent across the years, so we are naming the applicant rather than guessing which shed.
What it means for you
If you work at the depot. Your employer has not changed. A sale of the freehold changes who collects the rent, not who runs the operation or who issues the payslips. The lease commits Sainsbury’s to paying rent there until March 2036. That is not the same as a guarantee of jobs, and nobody should read it as one.
If you are watching the borough’s finances. Bedford Borough Council keeps a share of the business rates raised here, and the rules changed in April. From 2026/27 the government replaced the two multipliers with five. Properties with a rateable value of £500,000 or more now pay a new high value multiplier of 50.8p in the pound, against 48.0p for other properties above £51,000, as the council’s rate in the pound page sets out. A building of this size will fall in that top band. We wanted to publish its actual rateable value alongside that, but the Valuation Office’s property search returned an error every time we tried it on Friday, so we have left the figure out rather than estimate it.
If you are not sure which shed this is. Marsh Leys holds three large distribution centres, and the energy certificate register lists all of them at MK43 9AA: Sainsbury’s, Asda and Argos. The one that has been sold is Sainsbury’s.
For what else is being decided on sites around the borough, see our Bedford planning news page, and for the roads around the A421 junction, our Bedford roadworks and travel page.
Everything above comes from public records and from the buyers’ own announcement. We will add Sainsbury’s comment to this page if the company gives one.
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