Ediston property acquires the Citygate building in Newcastle for £18.95m

Ediston Property Investment Company has announced that it has acquired the Citygate building (pictured), a modern office building in Newcastle, for £18.95m (net of acquisition costs). The company says that the purchase reflects a net initial yield of 6.57% and will be funded from a combination of cash resources and an increase of £12.42m in the existing debt facility with Aviva Commercial Finance Limited at an all-in rate of 2.95%. They say that the loan-to-value ratio of the Company’s property portfoli, following this acquisition, will be 29.01%.

According to the company, Citygate provides 63,524 square feet of modern office accommodation with 70 car parking spaces. It is currently let to three tenants EY, UNW and N+D (London) Ltd, guaranteed by Grainger plc, and has a weighted average unexpired lease term (WAULT) in excess of 6 years. They say that around 89% of the income benefits from upward-only rent reviews in 2017, with the remaining 11% being reviewed in 2018. Following the acquisition, which is the thirteenth since the Company launched in October 2014, it is now almost fully invested. The company says that it is their aim to enhance the portfolio by purchasing regional office buildings which offer solid income streams as well as reversionary potential in the short term. They say that they believe Citygate is well placed to capitalise on the rental growth forecast to materialise in the city, owing to the favourable supply-demand balance.

Ediston property acquires the Citygate building in Newcastle for £18.95m : EPIC