LONDON, UK: AEW UK REIT plc (LSE: AEWU) has announced that it has bought a freehold, mixed-use property in York city centre for £10 million, with a net initial yield of 9.3%.
The property, which covers 99,769 sq ft, has five tenants, including National Car Parks Ltd (“NCP”), which occupies 75% of the income from the 297-space car park. NCP has nine years left on its lease, with a rent review in 2027 that will increase the rent in line with inflation, resulting in a forecast reversionary yield of over 10%. NCP is one of the UK’s largest car park operators, owned by Park24, a Japanese based multi-national parking operator, and the Development Bank of Japan. The other tenants are in the retail and office space on the ground and first floor.
The property is located inside the York City Wall, close to the historic centre of the city and its main attractions and retail areas. It is situated on a prominent corner site on George Hudson Street and Tanner Row.
The purchase is part of AEW UK REIT’s strategy to reinvest capital from recent sales into higher yielding assets. The company said it has about £15 million of cash available for further acquisitions from its pipeline.
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