AEW UK Long Lease REIT (AEWL) has announced that it has acquired a nursery property, 53 Victoria Road, in central Southampton. The property, known as the YMCA Woolston Nursery, was purchased by way of a sale and leaseback agreement with YMCA Fairthorne Group, a regional operation of the charity YMCA (the world’s largest youth charity). The acquisition AEWL’s second so far in 2019 and has been funded using proceeds from its recently extended debt facility with Canada Life. The purchase price of £2.1m reflects a net initial yield of 5.9%. AEWL’s manager, Alex Short, says that the acquisition improves diversification and the high net initial yield will be accretive to AEWL’s dividend.
Leased for 25 years – increases in line with CPI
The 8,097 square foot property comprises a modern, purpose-built nursery facility forming part of the Centenary Quay development, which has seen the addition of some 1,500 new homes since 2012. The lease arrangements provide the Group with an income stream of 25 years, from completion of the acquisition, which will increase annually in line with the Consumer Price Index. The property is leased to AEWL on a 250-year lease from July 2010 at a peppercorn rent (a very low or nominal rent).
About AEW UK Long Lease REIT
AEW UK Long Lease REIT Plc has been listed on the London Stock Exchange since 6 June 2017 and has a premium main market listing. It is managed by AEW UK Investment Management LLP and aims to generate a sustainable, secure and predictable income return, whilst at least maintaining capital values in real terms, by investing in a diversified portfolio of UK properties, with an attractive entry yield, predominately in alternative and specialist sectors.
AEWL invests in a diverse range of sectors that are underrepresented in institutional portfolios including leisure, healthcare, education, hotels, student accommodation, supported living and automotive. At least 85% of the gross passing rent from the portfolio’s leases will contain inflation linked rent reviews, and average initial unexpired leases in excess of 18 years at the time of investment. Further information is available at the company’s website: www.aewukllreit.com
About AEW UK Investment Management LLP
AEW UK Investment Management LLP employs a team comprising 23 individuals covering investment, asset management, operations and strategy. It is part of AEW Group, one of the world’s largest real estate managers, with just over €63.5bn of assets under management as at 30 September 2018. In Europe, as at 30 September 2018, AEW Group managed nearly €30bn in value in properties of all types, with close to 400 staff located in 9 offices. The Investment Manager is a 50:50 joint venture between the principals of the Investment Manager and AEW. Further information is available at the manager’s website: www.aewuk.com