Schroder Real Estate Investment Trust Limited Acquires Retail Warehouse
The Company announces that it has acquired a retail warehouse in Bletchley, Milton Keynes for £9.9 million, reflecting a net initial yield of 6.5%. The property is let to Matalan Limited for a further 6.5 years at a rent of £675,800 per annum.
The property comprises a freehold, 51,488 sq ft, retail warehouse in a prominent position on the south side of Milton Keynes adjacent to the junction of Watling Street and the A5 dual carriageway. The property adjoins a Tesco superstore and is a short distance from complementary retail warehouse occupiers including IKEA and retail parks such as Beacon Retail Park.
The property has a flexible planning consent permitting all retail uses except for food and has a site density of 35% with potential for future intensification of use. The rent paid by Matalan equates to £13.14 per sq ft which compares to the rent at Beacon Retail Park of approximately £20 per sq ft. Matalan have sublet 8,500 sq ft of the property to Carpetright Plc at a rent equating to £16.25 per sq ft.
Following completion of the acquisition the Company has cash, after adjusting for transaction costs and this quarter's dividend payment, of £15.6 million. This results in a net loan-to-value, based on the independent valuation as at 30 September 2014, and prior to any equity raised under the proposed placing announced on 17 November, of approximately 31%.