AEW UK REIT has purchased Freemans Leisure Park, an 8.4-acre freehold site in the centre of Leicester, for £11.15m. The purchase price reflects an attractive net initial yield of 10.6% and a capital value of £103 per sq ft.
The property, which totals 108,771 sq ft across five units along with service yards and 582 car parking spaces, is fully let to a group of national tenants including Odeon Cinemas, Mecca Bingo, Spirit Pub Company and Nando’s.
The asset provides a weighted average unexpired lease term (WAULT) to expiry of more than eight years and presents various short-to-medium term asset management opportunities, including rental growth prospects through upcoming rent reviews, the possibility of an EV charging letting, and potential alternative use development, such as hotel and restaurant, for areas of the site that have not already been developed.
The acquisition completes the company’s redeployment of sale proceeds from the disposal of Central Six Retail Park in Coventry and brings the company back to a fully invested position. The company has also identified a pipeline of investments available for purchase in the current market.
Laura Elkin, portfolio manager of AEW UK REIT, said: “We are very pleased to have completed this acquisition which returns the Company to a fully invested position. Freemans Leisure Park offers an accretive income profile, as well as being defensively priced relative to surrounding alternative-use land values. We continue to actively monitor a pipeline of investments and remain optimistic about the attractive opportunities for investment in the current market.”
