12th May 2016 10:59
LONDON (Alliance News) - Schroder Real Estate Investment Trust Ltd on Thursday said it has sold four of its properties for a combined GBP12.9 million, in line with its strategy to sell its smaller, lower yielding assets.
The trust said the sale of the four properties reflects an average net initial yield of 3.4%, with the total price in line with its last reported valuation at the end of December, but GBP2.0 million higher than its previous year-end valuation on March 31, 2015.
Schroder said it sold a retail parade in Bath city centre for GBP4.7 million on Tuesday, reflecting a net initial yield of 5.2% on expiry of rent free periods. Schroder added that the property was let to retailers including CEX Ltd and Cotswold Outdoor Ltd, with an average lease term of 7.4 years.
The trust said it has also sold a retail unit in Nottingham for GBP2.0 million, reflecting a net initial yield of 5.2% on expiry of a rent free period. The sale took place on April 1, Schroder added, and said it followed the completion of a letting to restaurant Tortilla Mexican Grill Ltd, at a rent of GBP111,000 per year.
Following exchange of contracts in April 2015, the sale of the mixed use office and leisure property completed as planned on April 4 for GBP4.0 million, Schroder added, with the price reflecting a net initial yield of 5.6%.
The final sale was of its office property in Fleet for GBP2.2 million, which completed on February 25, the trust said. The property was 77% vacant and the price reflected a net initial yield of 3.1%, before non-recoverable expenditure.
"These disposals are consistent with our strategy to sell smaller, lower yielding properties where asset management initiatives have been completed. The proceeds will be reinvested in a pipeline of on-going capital expenditure initiatives where higher income and total returns are expected," Nick Montgomery, head of UK Real Estate Investment at Schroder Real Estate Investment Management Ltd, said.
Shares in Schroder were up 0.5% at 58.01 pence on Thursday.
By Hannah Boland; [email protected]; @Hannaheboland
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