Standard Life Investments Property Income makes three acquisitions – Standard Life Investments Property Income Trust has completed three purchases for a total of GBP32.48m.
The largest of the three assets is a Tier 3 Data Centre in Birmingham, let to a major operator for a term of 20 years, subject to a tenant only lease break in year 14. The lease has annual rental increases in line with RPI, with a collar and cap of 1% and 4%. The property benefits from a good mixed use location and a large power supply. The purchase price represents an initial yield of 5.75%.
The company has also acquired a multi let office and retail unit in the City of London, close to Bank and Moorgate stations. The purchase price of GBP12.15m represents an initial yield of 7% with a rental guarantee top up, and 4.7% without the top up. The property has two floors vacant totalling circa 5,000sqft. The purchase price reflects a capital value of GBP715psf, which is less than vacant possession levels on several recent transactions.
The third asset is an industrial unit close to Kettering. The property is let to an engineering company that undertakes specialist aluminium moulding, which has taken a new 20 year lease with five yearly indexed reviews. The purchase price of GBP8.1m reflects an initial yield of 7.15%.
Jason Baggaley, fund manager of SLIPIT commented “These three purchases provide the company with a mix of secure long term income with indexation and asset management opportunity. The purchase of the City office reflects an opportunity to re-enter that market at an attractive price point, especially as 20% of the income is secured against two small retail units that trade very well and we look forward to marketing the two vacant floors to increase the yield on the property.”
SLI : Standard Life Investments Property Income makes three acquisitions