Warwickshire based IM Properties has invested more than £12 million in the forward purchase and development funding of a Chicago supermarket.

Working in partnership with Chicago based Bradford Real Estate Services, IM Properties has forward funded the development of the 71,248 sq ft supermarket in Vernon Hills.

The company has secured a 20 year lease of the property to Roundy’s Supermarket’s Incorporated at an annual rent in excess of £1 million. A successful grocery brand headquartered in Wisconsin, Roundy’s operates under five retail banners, with the IM Properties supermarket trading as a Mariano’s Fresh Market.

IM Properties managing director Tim Wooldridge is delighted to be expanding the company’s US portfolio with this latest deal.

He said: “US based developers were struggling to secure funding from their banks and we recognised an opportunity to expand IM Properties’ portfolio in the US by forward funding retail developments such as this. We have a member of the IM Properties team based full time in America and this has worked extremely well in helping us to secure this deal and build a close relationship with our tenant and development partner.

“Such has been the success of this first supermarket, that we are already progressing another property for Roundy’s in the nearby Palatine district of Chicago, once again with developer Bradford Real Estate Services.”

Forward funding transactions are a way to create new investment opportunities and are a tax efficient method of structuring development transactions. Typically, the transaction will involve the sale to a lender of a bare site with a pre-let in place conditional on construction of a building with the buyer agreeing to fund the scheme and then acquring the building at the end of the process minus the construction costs.

Focussing on the retail sector, IM Properties entered the US market in December 2007 with the purchase of a 135,000 sq ft retail store in Newport News, Virginia which is master-leased to Best Buy.