LONDON, UK: AEW UK REIT plc (LSE: AEWU), a real estate investment trust that invests in UK commercial property, has announced that it has sold two industrial assets in Yorkshire for a total of £16.1m, reflecting a premium to acquisition price of 31.2%.
The assets are Euroway Trading Estate in Bradford and Lockwood Court in Leeds, which were sold for £6.45m and £9.65m respectively. The sales prices represent a net initial yield (NIY) of 6.8% and 5.9% respectively, and a combined premium to the most recent valuation prior to going under offer of 13.5%.
Euroway Trading Estate was acquired by AEWU in November 2016 for £4.95m, with a new eight-year lease to Advanced Supply Chain (BFD) Ltd. The rent was increased by 9.1% in December 2019 following a rent review.
Lockwood Court was acquired by AEWU in February 2019 for £7.32m, with a new 10-year lease to L.W.S. (Yorkshire) Ltd, guaranteed by Harrogate Spring Water. In December 2019, AEWU secured a new 10-year lease to Harrogate Spring Water, after L.W.S. went into liquidation.
Laura Elkin, Portfolio Manager of AEWU, said: “Both Euroway Trading Estate and Lockwood Court have performed well, delivering strong returns to AEWU shareholders since acquisition. The value creation through strong performance of the Yorkshire industrial markets, coupled with our successful asset management initiatives, presented an opportunity to crystallise capital growth and reinvest the sales proceeds into higher yielding opportunities. As such, we expect to make further purchase announcements in the coming months.”