UK REIT, Redefine International has announced that it has exchanged contracts for the disposal of City Point in Leeds for £26.05 million.
Redefine International originally acquired the 5699 sqm office as part of the company’s AUK Portfolio acquisition in March 2016 for £21.6 million and over 17% vacancy. In January 2017, 1022 sqm was let to Blacks Solicitors LLP, bringing the asset to full occupancy. The sale represents a net yield of 5.8% and a 15.3% premium to the last reported market value. The geared internal rate of return over the investment period was over 20%.
Midlands Pension Fund acquired the property, which delivers total gross annualised rental income of £1.6 million with a WAULT of 3.7 years.
The disposal sinks with Redefine International’s strategy of recycling capital out of mature assets and into new growth opportunities. Further details on the company’s progress against strategic priorities will be provided in its interim results which are due to be announced on Wednesday, the 25th of April 2018.
“The disposal of City Point, Leeds represents yet another example of delivering value from the AUK acquisition. After two years of owning this asset, we have delivered an excellent 20.6% premium to the acquisition price, whilst also de-risking the portfolio by reducing our exposure to a maturing regional office investment market and an asset with a number of upcoming lease breaks and expiries. We are confident that the progress on our active recycling will support our relentless focus to deliver superior, sustainable and growing distributions” commented Mike Watters, Chief Executive.