Regional REIT sells more industrial property – Regional REIT has exchanged contracts with ARA Dunedin for the sale of a significant industrial property portfolio for £45.0m. This reflects a net initial yield of 6.75% to the purchaser and the price is 7.5% above the valuation as at 31 December 2020. After capital expenditure, the sale represents an uplift of 18.0% from the acquisition price.
Regional REIT’s current strategy is to exit the industrial sector in preference for higher yielding regional office investments. After this transaction, the company will have sold 62% (by value) of its industrial holdings held as at 31 December 2020.
The seven industrial properties (covering a total of 801,787 sq. ft.) are located in Bromborough, Erith, Nottingham, Scunthorpe, Telford, Winsford and Wisbech. During the company’s ownership, several asset management initiatives were actioned with the aim of increasing the value of the portfolio. These initiatives included a series of renovations and the subdivision of some of the larger units, which assisted in improving occupancy rates, rental income and in turn, capital values.
It is anticipated that the proceeds from the disposal will be promptly recycled into higher yielding office investments, further diversifying the portfolio by geography and income stream.
Completion is expected to take place in August 2021.
RGL : Regional REIT sells more industrial property
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