abrdn Property Income Trust (API) has secured over £1.3m in annual rent through new lettings and lease renewals.
In the office sector (which accounts for 18% of its portfolio by value), the company has completed a number of deals comprising:
- a new lease on the fourth floor at One Station Square in Bracknell, securing a rent of £132,250 per annum;
- the upsizing of existing tenant Egnyte Limited into 4,174 sq ft at The Pinnacle in Reading, at an annual rent of £130,000 – 11% ahead of the March 2023 valuation;
- a 5-year lease regear on the first floor at 160 Causewayside, Edinburgh, with the removal of the tenant break option, securing £157,000 of annual rent;
- the previously reported lettings to the Chamber of Commerce and UK Cab at 54 Hagley Road in Birmingham have now completed reflecting a total of 27,770 sq ft and £538,090 in rent
- a letting of part of the 4th floor at 54 Hagley Road to Property Investor Network, securing a rent of £49,830 per annum; and
- terms have also been agreed on two further lease renewals at 54 Hagley Road of 9,365 sq ft where the tenants are remaining in their existing suites and the rents are increasing by an average of just over 30% from previous levels.
The company said that the leasing activity was illustrative of API’s investment strategy of focusing on assets that are attractive to occupiers with good levels of amenity at attractive rental levels even in a market with significantly reduced demand and take-up.
In the industrial sector (which accounts for more than 50% of the portfolio), the company has completed a lease regear at Monkton Business Park in Hebburn. Hitachi Construction Machinery (UK) Limited has taken a new 20-year lease at a passing rent of £310,500 per annum, which is an increase of 19.4% over the previous passing rent. As part of the transaction, Hitachi is obliged to carry out a package of works that are anticipated to improve the EPC rating of the building to an “A”.
The EPC on API’s Bolton industrial unit let to DPD has been reassessed as an “A” following completion of the letting and the landlord’s refurbishment works. API carried out an extensive package of upgrades to the unit including the extension of the roof-mounted solar panel installation, an increase in on-site biodiversity and the inclusion of staff welfare facilities. Following the reassessment, the EPC has been lodged with a score of -54. This negative score reflects the fact that the unit is operationally carbon negative.
API’s speculative 107,000 sq ft industrial development at Knowsley, which is scheduled to complete at the turn of the year and has enhanced ESG credentials, has received a lot of occupational interest including proposals from two parties. The company said it was hopeful of agreeing a letting of the unit ahead of completion.
Refurbishment works at Rainhill Road in Washington are progressing (including the completion of a new 1,150kWp PV scheme on the roof) and are due to complete in early November. A new 15-year lease will start on completion.
All these lettings, along with the others completed since the end of September, will reduce the vacancy rate on API’s portfolio to 4.4%.
Mark Blyth, deputy fund manager of API, commented: “Despite challenging market conditions, we continue to have good success letting our void properties as well as retaining existing occupiers with lease regears. Reducing void property costs and increasing rental income, whilst at the same time ensuring a strong focus on ESG, will strengthen API’s overall financial standing and position it well for the future.”
API : abrdn Property Income Trust makes series of lettings