Thursday, 27 November 2014
Schroder Real Estate Investment Trust Ltd makes a further acquisition in Milton Keynes (UK)
Schroder Real Estate Investment Trust Ltd announces that it has acquired Heathfield Industrial Estate in Milton Keynes for £5.06 mln (approx. €6.4 mln). The property produces a rent of £410,883 (approx. €519,311) per annum, reflecting a net initial yield of 7.7% and a reversionary yield, assuming all units are let at current market rents, of approximately 8.8%. The property immediately adjoins the 213,536 ft² (approx. 19,838 m²). Stacey Bushes Industrial Estate in Milton Keynes that was acquired by the Company in August 2014.
The freehold property comprises a 28 unit industrial estate totalling 104,200 ft² (approx. 9,680 m²) that was originally built in the late 1980s, with the majority of the estate benefiting from a recent refurbishment. The current average rent is £3.94 per ft² (approx. €55 per 1 m²) with an average unexpired lease term, assuming the earlier of lease expiry or tenant break options, of approximately two years.
The acquisition provides critical mass in an established location with 18 of the 28 units at Heathfield smaller than those available at the adjoining Stacey Bushes estate. This is expected to create opportunities to add value through asset management by relocating tenants across the enlarged estate as their businesses grow or contract.
Following completion of the acquisition and receipt of the net placing proceeds of approximately £26.5 mln (approx. €33.5 mln), the Company will have cash balances of approximately £43.7 mln (approx. €55.2 mln).