Schroder Real Estate Investment acquires retail warehouse for €12.3 million (UK)

The Company announces that it has acquired a retail warehouse in Bletchley, Milton Keynes for £9.9 million (€12.3 million), reflecting a net initial yield of 6.5%. The property is let to Matalan Limited for a further 6.5 years at a rent of £675,800 per annum (€842 per annum).
The property comprises a freehold, 51,488 ft² (4.738 m²), retail warehouse in a prominent position on the south side of Milton Keynes adjacent to the junction of Watling Street and the A5 dual carriageway. The property adjoins a Tesco superstore and is a short distance from complementary retail warehouse occupiers including IKEA and retail parks such as Beacon Retail Park.
The property has a flexible planning consent permitting all retail uses except for food and has a site density of 35% with potential for future intensification of use. The rent paid by Matalan equates to £13.14 per ft² (€16 per ft²) which compares to the rent at Beacon Retail Park of approximately £20 per ft² (€26 per ft²). Matalan have sublet 8,500 ft² (743 m²) of the property to Carpetright Plc.
Following completion of the acquisition the Company has cash, after adjusting for transaction costs and this quarter’s dividend payment, of £15.6 million (€19,436 mln). This results in a net loan-to-value, based on the independent valuation as at 30 September 2014, and prior to any equity raised under the proposed placing announced on 17 November, of approximately 31%.
Source: SREI