RDI sells City Point in Leeds to West Midlands Pension Fund for £26m

By James Wallace - Tuesday, April 10, 2018 10:27

RDI has exchanged contracts for the disposal of City Point in Leeds for £26.05m.

The 61,379 sq ft office, which has been acquired by West Midlands Pension Fund, delivers total gross annualised rental income of £1.6 million with a WAULT of 3.7 years.

The sale price represents a net initial yield of 5.8% and a 15.3% premium to the last reported market value. The geared internal rate of return ('IRR') over the investment period was over 20%. The property was originally acquired as part of the REIT’s AUK Portfolio acquisition in March 2016 for an acquisition price of £21.6m with over 17% vacancy. In January 2017, RDI let 11,000 sq ft to Blacks Solicitors, bringing the asset to full occupancy.

The disposal is in line with RDI's stated 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 will be announced on Wednesday, 25 April 2018.

Mike Watters, Chief Executive, said: “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.”

James Wallace is a freelance consultant and can be reached via Linkedin or email: jawallace32@gmail.com

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