13th Sep 2018 09:09
LONDON (Alliance News) - RDI REIT PLC on Thursday said it will acquire two distribution units in Bicester through a forward funding agreement and has disposed of its Lochside office in Edinburgh.
The GBP26.0 million forward funding agreement is with Albion Land Ltd. Under the agreement RDI has acquired approximately 13.5 acres of land, with phase 1 construction of the two units expected to commence immediately.
The real estate trust said it is in "early stage discussions" with potential occupants of the units, but that both are being developed on a speculative basis. Once let, the units have an anticipated 6.5% yield on cost.
"This acquisition once again highlights our disciplined approach to improving the quality of our income focused portfolio, with disposal proceeds being promptly redeployed into growth opportunities," said RDI Chief Executive Mike Watters.
"The acquisition of high-quality distribution assets in Bicester, through a forward funding agreement, presents a clear opportunity to increase our exposure to a sector with strong structural support and rental growth prospects, at an attractive entry price," Watters added.
RDI's Lochside disposal was completed at the end of August for GBP13.1 million, which represents a net initial yield of 5.9% and a 13.7% premium to is most recent reported market value. Lochside was acquired in March 2016 for GBP11.0 million.
Shares in RDI were down 0.8% at 32.50 pence on Thursday.
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