Schroder Real Estate Investment Trust Limited Acquires Stacey Bushes Industrial Estate

Posted: 19th August 2014 09:02

The Company announces that it has exchanged unconditional contracts to acquire Stacey Bushes Industrial Estate in Milton Keynes for £9.2 million. The property produces a rent of £755,726 per annum which results in a net initial yield of 7.76% per annum. This follows the announcements regarding recent sales including the announcement dated 4 August 2014 with regards to the disposal of Wembley, which produced gross sale proceeds of £7.56 million and was a non-income producing site.
The freehold property comprises a 213,536 sqft multi-let industrial estate immediately adjacent to the A5 dual carriageway on the west side of Milton Keynes. The property, whichwas originally constructed in the 1980's, has recently undergone an extensive refurbishment to provide a modern accommodation with unit sizes ranging from 3,700 sqft to 10,000 sq ft. The property is currently let to12 tenants with an average unexpired lease term, assuming all tenant breaks are exercised, of 4.5 years.
There are currently eight vacant units on the estate, representing approximately 20% by area, providing scope to add value through a strategy to re-let the units to increase net income. Assuming the vacant units are re-let at rents of between £4 and £4.50 per sqft, the yield increases from 7.76% to approximately 10%.
Following completion of the acquisition, which is expected to take place on 21August 2014, the Company will have cash of approximately £14.2 million and a net loan-to-value, based on the independent valuation as at 30 June 2014, of approximately 32%.

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