LONDON, UK: AEW UK REIT has unconditionally exchanged on the acquisition of a 67,020 sq ft mixed-use block located in Bath metropolis centre at a price of £13 million, reflecting a low capital worth of £194 per sq ft and an attractive net preliminary yield of 8.5%.
Completion of the asset buy is anticipated later this week. The Company has additionally accomplished the acquisition of a freehold retail asset within the London Borough of Bromley for a price of £5,300,000, reflecting a low capital worth of £101 per sq ft and an attractive net preliminary yield of 8.7%. Following these two acquisitions, the Company will have circa £7 million to deploy on different new purchases whereas retaining sufficient money for working capital purposes.
The asset in Bath, known as Northgate House, provides 48,805 sq ft of retail lodging fronting on to Bath’s High Street, Upper Borough Walls and Union Passage. The retail lodging is let to eleven tenants anchored by TK Maxx which has recently renewed its dedication to the location by agreeing the removal of a tenant break option. Retail lettings present a weighted unexpired lease time period in extra of 5 years. The remaining 18,215 sq ft of lodging comprises grade A specification offices recently refurbished by the vendor. The workplace lodging is fully let to a wholly owned subsidiary of Regus Group till 2032, buying and selling as co-working brand, Spaces.
The Bath workplace market is characterised by tight present and Spaces provides the largest and solely worldwide model of serviced workplace lodging buying and selling within the city. The workplace passing rent of £22 per sq ft provides a low base from which the Manager hopes to develop income due to a recent excellent rent review.
Northgate House is centrally located in Bath between Union Street, Bath’s prime retail pitch, and High Street which hyperlinks to the well-known landmark of Pulteney Bridge. Bath is a designated UNESCO World Heritage Site and one of many UK’s top vacationer locations attracting some 6.25 million guests per annum.
The asset is held leasehold from Bath and North East Somerset Council for an unexpired interval of 178 years at a peppercorn rent.
The Bromley asset is discovered in a prominent place on the western side of the pedestrianised Bromley High Street and provides 54,215 sq ft of accommodation, let in its entirety to Next Holdings Limited. The lodging comprises a four-storey retail unit with the ground, basement and first floor offering gross sales lodging with ancillary lodging on the second floor. The unit is known to commerce strongly for the retailer.
Next Holdings Limited has occupied the property since 2000 and, in September 2021, renewed on a four-year lease at a rebased level of rent. A complete retailer re-fit was undertaken by the tenant at this time, demonstrating the retailer’s dedication to the location.
Bromley is a well-connected Greater London borough, with direct train hyperlinks to London Victoria and London Bridge in sixteen and 20 minutes, respectively. The space is present process significant regeneration with quite a few residential-led schemes, together with the numerous Churchill Quarter mixed-use development offering over four hundred homes, located simply 50 metres to the south of the property.
Commenting on the purchase, Laura Elkin, Portfolio Manager of AEW UK REIT said, “Over recent weeks, we have taken time to carefully consider the place best worth can be discovered and we’re delighted to have acquired these excessive yielding retail assets each located in strong locations. The buy costs of each assets reflect low capital values which we believe will present excellent worth to our shareholders over the lengthy term. We proceed to analyse a really interesting pipeline of potential acquisitions for AEWU’s technique and, following full funding of the remaining capital available for deployment, the Company’s earnings are anticipated to return to full cowl of its dividend.”