AEW UK REIT buys Dagenham leisure park – AEW UK REIT has acquired the eastern section of London East Leisure Park, Cook Road, Dagenham and an industrial unit let to Plastipak UK Limited on Gresford Industrial Estate, Wrexham for a combined price of GBP22.5m.
Dagenham Leisure Park
London East Leisure Park is a purpose built leisure destination totalling 149,132 sq ft. The portion bought by AEW UK REIT comprises 72,245 sq ft and was acquired for GBP11.5m. The property currently houses Mecca Bingo, McDonalds and Hollywood Bowl and provides a net initial yield of 8% with a WAULT of 12.8 years. A major attraction of the park is its location, 11 miles east of Central London and being highly accessible both via public transport but also with close links to the A13 and M25. Dagenham is an area due to go through major regeneration over the next 10 years with the Council recently setting out plans for the development of thousands of new homes as well as the first film studio to be built in London for 25 years. The surrounding area comprises a mix of retail, industrial and residential property.
Industrial unit
The Wrexham property, a 279,541 sq ft industrial unit leased to Plastikpak UK Limited, comprises 3 units within a self-contained and secure site and was acquired for GBP10.0m. The asset benefits from its location in Gresford Industrial Estate, approximately 2 miles north of Wrexham town centre, with key motorway links across the north west via the A483. A key feature of the building is its large power supply at 18 megawatts which is rarely seen in buildings of this nature and could therefore be attractive to future tenants. The asset provides a net initial yield of 8.3% and a WAULT of 14 years, with a fixed rental uplift due in 2022.
In order to complete the aforementioned acquisitions the company has drawn GBP10 million from its existing loan facility with RBS International Limited which matures in October 2020. The facility amount has now been increased to enable the company to utilise the facility up to GBP60 million. The company will continue to target an amount equivalent to 25% of the Gross Asset Value as measured at drawdown, which can be increased to a maximum of 35% of Net Asset Value ahead of an equity fundraising or asset disposal.
Alex Short, Portfolio Manager, AEW UK REIT, commented: “We are very pleased to announce the above acquisitions which now bring the Company’s debt level back in line with its long term loan to value target of 25%. The Company has now completed four acquisitions so far this year totalling c GBP39m providing a combined net initial yield of 8.6% which is supportive of our target annual dividend of 8p per share. We are encouraged by the strength of our current pipeline and are confident that the buying opportunities that the Company has been taking advantage of since IPO persist.”
AEWU : AEW UK REIT buys Dagenham leisure park