Regional REIT has acquired three offices in Derby, Milton Keynes and Crawley for a total of £48.2m, reflecting a blended net initial yield of 8.7%.
The assets
It has acquired Orbis 1-3, Derby (totalling 122,153 sq ft) for £19.8m, and a 8.6% yield. It is located on a 7.54-acre site on the Pride Park business park. The offices (with an energy efficiency rating (EPC) of B) are currently 100% let to the DHU Healthcare C.I.C, which provides partner services to the NHS; Firstsource Solutions UK Ltd; and Tentamus Pharma (UK), a specialist pharmaceutical company. Total contracted rent is £1.8m per annum.
In Milton Keynes, it has acquired the Linford Wood Business, (totalling 115,315 sq ft) for £15.9m, and a 8.9% yield. It is set in 8.4 acres, in close proximity to Central Milton Keynes, with extensive parking. The site comprises one single-let and four multi-let office buildings, all of which are rated EPC C, and are let to a range of tenants including Kantar Consulting and IM Serve Europe, producing an income of £1.5m per annum.
Finally in Crawley, it has bought Origin 1 & 2 (totalling 45,855 sq ft) for £12.5m, reflecting a yield of 8.4%. The two office buildings (rated EPC B and C respectively) are situated on a 1.9-acre corner site on Crawley High Street. The three and four storey offices are fully let and generate in aggregate a rent of £1.1m per annum.
In addition to the acquisitions, the company has sold a number of smaller vacant and non-core assets for a total of £35.1m at a net initial yield of 6.6%, which it said was broadly in line with their 31 December 2021 book value, taking the overall disposals this year to £68.6m.
Stephen Inglis, chief executive of London & Scottish Property Investment Management, the asset manager of Regional REIT, said: “We are delighted that the company has made further accretive office acquisitions supported by high quality tenants in regions which we have identified as future growth areas. We believe all three acquisitions have considerable potential to drive further value for our shareholders through our active asset management approach and we look forward to providing shareholders with further progress on our ongoing programme of capital recycling in due course.”
RGL : Regional REIT splashes £48.2m on trio of offices