Ediston Property Investment Company has acquired Springkerse Retail Park, Stirling, for £21.85m, reflecting a net initial yield of 9.54%.
The group has bought the 162,593 sq ft retail park from the proceeds of its sale of a Tesco supermarket, with the net operating income from the new acquisition 35% higher than the rent received from Tesco, and therefore accretive to dividend cover.
The retail park comprises 12 units and is let to 10 tenants that produce an annual passing rent of £2.23m. The park is anchored by B&Q, with other tenants including Wren Kitchens, DFS, Pets at Home and Halfords. Ediston said it plans to carry out improvement works on the site that should increase the lettability of the two vacant units. On completion of the letting of these two vacant units, the yield is expected to rise to 10.8%.
Calum Bruce, investment manager, said: “The purchase of this asset is consistent with our recently updated investment strategy of acquiring retail warehouse parks. It is our objective to recycle capital from lower yielding assets into properties which are more suited to our intensive style of asset management, and this acquisition achieves this aim.”
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