Ediston sells office building and buys a retail park
Source - SMW
Ediston Property Investment Company has sold an office building in Sheffield and bought a retail park in Sunderland.
The group said it had sold its office building at Cutlers Gate, Sheffield, to UK Commercial Property Trust Limited for £20,165,000, reflecting a net initial yield of 5.00% (31 March 2017 value: £19,775,000).
It said the property comprised 61,638 sq. ft. of modern offices and was let to Capita Business Services Limited, with a guarantee from Capita plc, until December 2039.
The property was acquired by the company in October 2014 as part of the seed portfolio.
It said: "During the hold period, the investment manager used its relationship with the tenant to extend the lease term from 11 years to 25 years, improve the rent review provisions to annual RPI uplifts, and secure the Capita plc guarantee, all of which improved the value of the asset."
The company said it had re-invested the sales proceeds by acquiring Pallion Retail Park in Sunderland.
The Company said it had acquired 100% of the units in a Jersey Property Unit Trust (JPUT) for £25,600,000.
JPUT's sole asset was Pallion Retail Park, Sunderland.
Ediston said that taking into account the costs of acquisition and a rental guarantee on one vacant unit the net initial yield to the company was 6.74%.
Ediston said: "Pallion Retail Park, which occupies a prominent position to the North West of the city centre, extends to 131,349 sq. ft., across nine units.
"The immediate area is undergoing significant infrastructure change with the construction of the New Wear Bridge and the Sunderland Strategic Transport Corridor, both of which will benefit the asset.
"The park has an open A1 (part food) planning consent, is let to tenants including B&M, Dunelm, Matalan, Iceland and Poundstretcher, and has a weighted average unexpired lease term (WAULT) in excess of eight years."