Schroder Real Estate trust sells low yielding property
The £114.8m Schroder Real Estate investment trust has sold one of its Hampshire properties to an owner-occupier.
Cedar House, located on Ancells Business Park in Fleet, has been sold to Design IT Solutions for £1m. The sale price compares with an independent valuation of £800,000 on March 31.
Design IT Solutions is the only tenant in the 13,343 sq ft property, renting 7,609 sq ft of the building with the remainder laying vacant. The company is currently subject to a rent-free period which ends December 2012, when the rent would have become £66,415 a year.
The sale price reflects a yield, on expiry of the rent-free period, of 6.3%. This falls to about 3.4% after non-recoverable spending linked to the vacant space is taken into account. (article continues below)
Nick Montgomery of Schroder Property Investment Management, the trust’s manager, says: “This transaction represents a further disposal of a low yielding asset and closely follows last week’s announcement regarding the sale of a low yielding industrial estate in Havant for £4.6m.
“These disposals are consistent with the company’s strategy of selling lower yielding assets, on completion of our asset management plans, to strengthen its balance sheet in anticipation of the loan re-financing event in July 2014.”
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