UK Commercial Property buys Asda in Torquay – UK Commercial Property REIT has completed the acquisition of an ASDA supermarket in Torquay, Devon, from Aviva Investors for £16.6m, representing a net initial yield of 4.70%, rising to 5.24% in July 2021.
The 33,000 sq ft supermarket in Torquay is fully let to ASDA on a long lease with an unexpired term of 15.5 years. The lease is subject to five yearly RPI linked rent reviews, with the next due in July 2021. ASDA, which is one of the UK’s ‘big four’ supermarkets, with a 14.4%1 share of the UK grocery market has occupied the store since 2011. The store, which includes 169 car parking spaces, is in a strong location and is accessed via Regent Close off the A322 Newton Road. The property benefits from an expansive catchment area with a total population of 188,000 in the immediate vicinity, as well as limited nearby competition.
In a separate transaction, the trust has also agreed to forward fund the development of a strategically located purpose built student accommodation asset at 41-45 Gilmore Place in central Edinburgh for £29.1m. The purchase of land is expected to complete in February 2021, with delivery of the asset due in 2022, in time for the 2022/23 academic year.
The new 230-bed development will comprise over 90% en-suite cluster rooms and a small number of studios, with completion expected for the start of the 2022/23 academic year. The land, which has the benefit of full planning permission for the development, is to be acquired from S1 Developments for £6.5m with an additional capped funding commitment of £22.6m.
The scheme is in a prime location to serve all three of Edinburgh’s universities, in particular the University of Edinburgh, as well as being in close proximity to George Square and the student quarters of Marchmont and Brunstfield. The high quality design of the property also includes large common areas, music rooms and bike storage. A specialist operator will be appointed to manage the asset.
Will Fulton, the lead manager, said: “Whilst the current COVID-19 environment has created a challenging environment for students we anticipate good demand for the 2022/23 academic year and beyond. This scheme is not only in an excellent location in one of the world’s leading university cities but will also offer students high quality modern accommodation with amenities.”
The purchases will be funded through existing cash resources, helped by the sale of the M8 Interlink Industrial Estate, Coatbridge, for £25.4m. The disposal is in line with UKCM’s strategy to generate capital for reinvestment into opportunities with longer-term fundamentals.
Following these transactions UKCM remains well capitalised with £60m of cash resources available for investment and access to a further £150m of undrawn revolving debt.
UKCM : UK Commercial Property buys Asda in Torquay