RDI REIT has sold its UK retail parks portfolio for £156.9m.
The six assets that make up the portfolio has been sold to M7 Real Estate for a net initial yield of 7.5%. The sale price was a 3% discount to February 2020 book value.
The group said the deal, which is expected to complete in October, was a “significant milestone in the ongoing repositioning of the company’s portfolio”. RDI’s overall retail exposure will be 11.8% on completion of the deal, down from 28.4% in February 2020.
RDI has recently announced disposal of the Schloss Strassen Center in Berlin for €50.5m, with the rest of its German retail assets at various stages of sale negotiation.
The UK retail park portfolio has an annual rental income of £12.5m, a WAULT of 7.3 years and occupancy of 98.4%. The portfolio comprises the following assets:
· Banbury Cross Retail Park, Banbury;
· St Davids Retail Park, Bangor;
· Milton Road Retail Park, Edinburgh;
· Queens Drive Retail Park, Kilmarnock;
· Priory Retail Park, Merton, London; and
· The Arches, Watford, London.
The portfolio forms part of the group’s £275m AUK financing facility which includes a £137.5m revolving credit facility. The all-in interest rate for the facility is currently 3.2%. The anticipated disposal proceeds will be used to reduce the revolving credit facility by around £100m, providing a significant reduction in leverage. The group’s pro-forma loan-to-value (LTV) based on the 29 February 2020 values will be reduced to 30.2% (February 2020: 41.8%) on completion.
RDI : RDI REIT sells UK retail park portfolio for £156.9m