Legal & General Property ('LGP') announces that, on behalf of its Managed Fund, it has acquired Stevenage Leisure Park from Aviva Life & Pensions UK Limited for circa £40 million (approx. 48 million), reflecting a net initial yield of 6.5%.
Stevenage Leisure Park.
Situated in the center of Stevenage, the leisure park provides circa 200,000 ft² (approx. m²) of leisure space across 17 units and is anchored by a top-trading 16-screen Cineworld multiplex cinema.
The scheme is fully let with other key anchors being a David Lloyd Health and Fitness Centre, and a Hollywood Bowl. There are two Drive-Thru restaurants, eight standalone restaurants including units trading as a Chiquito and a Nando's, a nightclub let to Allied Kunick and a further unit let to children's educational and play facility, DP Leisure.
A further standalone building has been sold off on a long lease and currently trades as an NHS Health Centre. It also provides 1,320 car parking spaces.
With an average unexpired lease term exceeding 10 years, the park provides a defensive income profile. To complement this, LGP has already identified a number of significant asset management opportunities at the scheme to provide income growth over the medium term.
The park is prominently situated adjacent to Stevenage Rail Station and transport links score well on a sustainability basis. Trains provide access to the capital within 20 minutes.
Mark Russell, Fund Manager at Legal & General Property, comments: "The Leisure sector offers attractive risk-adjusted income streams with a blend of fixed rental increases and reviews to Open Market Rental Value. It therefore provides an attractive alternative to some of the more traditional investment sectors."
"The acquisition of Stevenage Leisure Park is in line with the Fund strategy to purchase assets with strong property fundamentals and which offer opportunities for value enhancement through the implementation of proactive asset management initiatives."
Montagu Evans acted for LGP and CBRE acted for Aviva Life & Pensions UK Limited.
Source: FTI Consulting