Redefine International, the FTSE 250 income-focused UK REIT, announces that it has completed on the sale of the Sytner BMW showroom in High Wycombe for €28.3m (£26.1m) to a UK pension fund. The sale price reflects a net initial yield of 5.0% and a premium of 5.8% to the 28 February 2017 book value. The property was acquired in March 2016 as part of the AUK transaction. The disposal provides an opportunity to recycle capital out of an asset with limited near-term rental growth prospects at a low initial yield.
In the first half of the financial year the Company disposed of €103.2m (£95m) of assets at an average premium of 12.4% to the 31 August 2016 book value. It has since exchanged or completed on a further €50.6m (£46.6m) of assets which includes the sale of High Wycombe, at an average net initial yield of 5.8% and a premium of 10.7% to the 28 February 2017 book value. The other disposals include two secondary office assets in Bedford and Chatham and a standalone Carphone Warehouse unit at Merton Priory Retail Park.
The disposals are in line with the Company’s strategy of enhancing the income characteristics of its portfolio by allocating capital to assets and locations that can deliver long term sustainable income returns.
Mike Watters, CEO of Redefine International, commented: “This disposal is a further example of the quality of the assets in the AUK transaction, which has provided a number of opportunities to extract value over the last 18 months in line with our strategy. Together with the other recent sales, the transaction provides the opportunity to recycle capital into new investments, where we can use our asset management skills to deliver stronger income returns over the long term.”
