Business
Acquisition of Manchester city centre asset
Acquisition of Manchester city centre asset.
About this update from Schroder Real Estate Investment Trust Ltd
[{"type":"text","content":"\n \n \n \n \n \n Schroder Real Estate Investment Trust Limited\n \n \n (\"SREIT\" / the \"Company\" / \"Group\")\n \n \n \n \n \n Acquisition of Manchester city centre mixed-use office and retail asset for £14.7 million\n \n \n Schroder Real Estate Investment Trust Limited, the actively managed UK-focused REIT, announces the acquisition of St. Ann's House in Manchester, for £14.7 million, reflecting a net initial yield of 7.8%, a reversionary yield of 9.1% and a low average capital value of £283 per sq ft. The mixed-use office and retail asset generates £1.22 million per annum of headline rent compared with an estimated rental value (\"ERV\") assessed by the independent valuer of £1.33 million.\n \n \n The freehold, 51,885 sq ft building, is 96% occupied and comprises 40,277 sq ft of office space over five upper floors with five retail units at the ground floor level and ancillary basement space. It is prominently located on St. Ann's Square, near to the prime retail core. St. Ann's Square features a listed church, the Royal Exchange theatre, a mix of office occupiers and high-quality luxury retail as well as leisure operators. The building benefits from its proximity to two tram stations that are within four and eight minutes' walk respectively.\n \n \n \n Nick Montgomery, Fund Manager of SREIT, commented:\n \n \n \n \"This acquisition is line with the strategy to selectively acquire income producing assets with good fundamentals and the potential to add value through active asset management initiatives, with a focus on improving sustainability credentials. Compared to other major cities, Manchester, which is one of the Company's high conviction locations, currently has the lowest office vacancy rate, and we expect relatively higher growth in office rents over the next five years.\"\n \n \n The office space is fully let to four office tenants at an average rent of £18.65 per sq ft, with the potential to increase rental levels through refurbishment and improving sustainability performance. There is also the opportunity to enhance income by offering fitted out office space. The tenants are:\n \n \n ·\n Ingeus UK Limited, a company that helps governments and employers design and deliver people-related services, at £405,000 per annum (£20.62 per sq ft) or 33% of total income;\n \n \n ·\n Ecclesiastical Insurance Office...