LONDON, UK: AEW UK REIT plc (LSE: AEWU) announced the acquisition of the 6.04 acre Railway Station Retail Park in Dewsbury for a price of £4.7 million.
The purchase price reflects a low capital value of only £82 per sq ft and provides an attractive net initial yield of 9.4%.
The park is fully let with a low average passing rent of £8.28 per sq ft, which the Investment Manager believes provides strong potential for rental growth. Tenants include Sports Direct, Mecca Bingo, Fieldrose Ltd, trading as KFC, and the Danish furniture retailer, Jysk.
The park occupies a prominent location on the edge of the town centre within an established retail and leisure area. Neighbouring occupiers include Sainsburys, Aldi, Matalan, Pets at Home and Iceland as well as a council operated library and sports facility. Dewsbury has a tight supply of retail warehousing stock, with no current vacancies within the town.
Commenting on the sale, Laura Elkin, Portfolio Manager of AEW UK REIT said, “This latest acquisition supports our view that the current market continues to provide investment opportunities that deliver dividend accretive income streams while also providing future potential for capital growth. Our work undertaken on the tenants of the park has shown that they trade well from the location and we expect an attractive level of income to be sustained”.