7th Sep 2020 08:56
(Alliance News) - RDI REIT PLC said Monday it has agreed to sell its UK retail parks portfolio to Europe-focused real estate investor M7 Real Estate Ltd, for GBP156.9 million, reflecting a net initial yield of 7.5%.
The portfolio consists of six assets, with two in London, and the remaining four in Banbury, Bangor, Edinburgh and Kilmarnock.
As at February 29, the portfolio had gross annualised rental income of GBP12.5 million, a weighted average unexpired lease term of 7.3 years and occupancy of 8.4%.
The sale is expected to be completed in mid-October, and the London and Johannesburg listed real estate investment trust will use the proceeds to reduce its revolving credit facility by GBP100 million.
The remaining proceeds will be held as cash. RDI said the sale is part of its strategy to reposition the company's portfolio, and reflects a pro-forma reduction in the group's overall exposure to 12% from 28% in February.
"Together with the disposal of Schloss Strassen Center in Berlin just last week, we have taken a substantial step forward in the implementation of our portfolio strategy in a very short space of time and against a challenging backdrop. In just 18 months since announcing our strategic review, we have undertaken around GBP330 million of disposals and our teams working on these transactions deserve to be commended for markedly reducing our exposure to the retail sector," said Chief Executive Officer Mike Watters.
Shares in RDI REIT were up 5.3% in London at 93.20 pence, while its Johannesburg shares were 6.4% higher at ZAR20.26 on Monday.
By Dayo Laniyan; [email protected]
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