TAP, the listed high income UK commercial property investment company, announces the disposal of six of its investment properties for a total of £10.7 million which will be used to repay debt across its two banking facilities.
The disposals were undertaken as part of the normal course of business at an average of 8.5% below the March 31, 2009 valuation and reflect an aggregate net initial yield of 9.0%.
The disposals comprised two industrial properties, three retail warehouses and one retail complex:
The Orbit Centre, Ashworth Road, Bridgemead, Swindon
A long leasehold estate of 20 small warehouses and trade counter units, on approximately 2.04 acres, let to a combination of national and local covenants including City Sprint, HSBC Bank, The Swindon Bed Centre, and the Battery Shop. Over 75% of the leases expire over the next three years. Sold to a local investor for a sum of £1.7 million reflecting a yield of 10.8%.
Granville Street, Dover and Bradfield Road, Huddersfield
Two detached approx. 1,400-m² retail units let to Halfords on a leases expiring in 2021, and subject to five-yearly rent reviews with the next review due in 2011; both sold to a group of private investors for a total of £4.8 million reflecting an initial yield of 8.9%.
Weedon Road, Northampton
A detached 1,200-m² retail unit let to Halfords on a lease expiring in June 2016. Sold to a private investor for the sum of £2 million, reflecting a yield of 9.0%.
Market House, Market Square, Aylesbury
A parade of three retail units at ground floor with two floors of ancillary/office accommodation above, The units are let to National Grid Holdings, Dolland & Aitchinson, and Tui UK Limited with leases that expire between 2013 and 2015. Sold to Private Investors for the sum of £1.9 million, reflecting a yield of 9.5%.
Mackintosh Road, Kirkton Campus, Livingston
A vacant industrial unit of 557 m² occupying a site area of approximately 1.28 acres. Sold to an adjoining occupier for £0.3 million.
Through these sales the TAP portfolio has been re-balanced with less exposure to the Halfords covenant within our retail warehousing holdings, reduced exposure to high street retail, and the disposal of a small element of our void industrial. We continue to be focused on the income within the portfolio and will keep shareholders informed of future material lettings within the property portfolio.
Commenting on the transactions, Chris Carter Keall, Fund Manager for TAP at Valad Asset Management Limited the Property Fund Adviser, said: "These disposals were set out in the Business Plan at the end of Q1 2009. We are pleased that the levels achieved were in line with expectations and this shows a continuing demand for smaller assets within the private investor market.
"The receipts from these disposals, will be applied to repayment of loans, and will ensure that there is no risk that TAP will be in breach of any of its covenants and will put the Company in a stronger financial position going forward."
Source: Tavistock Communications Limited