Schroder Real Estate Investment Trust acquires Stacey Bushes industrial estate, Milton Keynes for € 11.47 million (UK)

The Company announces that it has exchanged unconditional contracts to acquire Stacey Bushes Industrial Estate in Milton Keynes for £9.2 million (approx. € 11.47 million).
The property produces a rent of £755,726 per annum (approx. €942,000 ) which results in a net initial yield of 7.76% per annum. This follows the announcements regarding recent sales including the announcement dated 4 August 2014 with regards to the disposal of Wembley, which produced gross sale proceeds of £7.56 million (approx. € 9.42 million) and was a non-income producing site.
The freehold property comprises a 213,536 ft² (approx. 19,838 m²) multi-let industrial estate immediately adjacent to the A5 dual carriageway on the west side of Milton Keynes. The property, which was originally constructed in the 1980’s, has recently undergone an extensive refurbishment to provide a modern accommodation with unit sizes ranging from 3,700 ft² (approx. 344 m²) to 10,000 ft² (approx. 929m²) The property is currently let to 12 tenants with an average unexpired lease term, assuming all tenant breaks are exercised, of 4.5 years.
There are currently eight vacant units on the estate, representing approximately 20% by area, providing scope to add value through a strategy to re-let the units to increase net income. Assuming the vacant units are re-let at rents of between £4-£4.50/ft² (approx.€5-€5.60/m²), the yield increases from 7.76% to approximately 10%.
Following completion of the acquisition, which is expected to take place on 21 August 2014, the Company will have cash of approximately £14.2 million (approx. €17.7 million)and a net loan-to-value, based on the independent valuation as at 30 June 2014, of approximately 32%.
Source: FTI Consulting