Schroder Real Estate Investment Trust Ltd - Asset Management Update
PR Newswire
London, September 10
For release 11 September 2019
Schroder Real Estate Investment Trust Limited
("SREIT"/ the "Company" / "Group")
ASSET MANAGEMENT UPDATE
Schroder Real Estate Investment Trust, the actively managed UK-focused REIT, provides an update on asset management activity:
Manchester, City Tower (£ figures below represent SREIT's 25% share)
An agreement has been exchanged for St Pirans School (GB) Ltd, trading as the London School of Commerce, to lease 8,215 sq ft on the sixth floor on a seven year term at an initial rent of £59,556 per annum. The tenant will receive six months rent free and SREIT will contribute £62,500 to the cost of the tenant fit out.
Plexus Legal LLP, who currently occupy 9,120 sq ft on the 21st floor paying a rent of £45,600 per annum, has completed a ten year lease extension with effect from its current contracted expiry in March 2020. The new rent is £53,850 per annum and the tenant will receive an incentive of 7.5 months rent free from completion.
Following this activity there remains a further 70,000 sq ft of office space available at City Tower with a rental value of approximately £400,000 per annum. SREIT is seeing a healthy level of occupier demand for the space and further lettings are under negotiation.
Headingley Central, Leeds
Headingley Central is a mixed use retail, leisure, office and hotel asset located in a densely populated area of Leeds. The asset was acquired in 2014 and the strategy on acquisition was to convert the offices to alternative uses which were complementary to the ground floor retail and leisure. The first phase of this strategy involved converting an eight story office into a Premier Inn hotel that completed in 2017.
In August 2019 the remaining offices totalling 33,500 sq ft were vacated by their tenant which had been paying £327,360 per annum. An agreement for lease has now been exchanged with The Gym Limited, one of the UK's largest gym operators, to lease 21,000 sq ft of the vacated office on a fifteen year lease without breaks at a rent of £240,000 per annum, representing a 16% increase on the previous apportioned rent. The lease has fixed uplifts of 10% at years five and ten and the tenant will receive nine months rent free.
The agreement is subject to SREIT carrying out refurbishment works to accommodate the gym use at a cost of approximately £1.8 million. This cost will be partly off-set by a dilapidations payment received from the outgoing office tenant of £750,000 (i.e. a net cost to SREIT of £1.05 million). The gym letting is subject to planning consent and an application has been made which should be determined during 2019. The works are scheduled to take seven months resulting in lease completion in the second half of 2020.
The letting will improve tenant mix and footfall which will benefit the retail and leisure tenants that include Sainsbury's, Boots, Costa Coffee and Pizza Express. The remaining 12,500 sq ft of vacated office space is being marketed for office and alternative uses.
Peterborough, Unit B Finmere Park
In May 2019 an agreement was exchanged with EDP Insulation Group to lease Unit B Finmere Park, which was subject to SREIT refurbishing the 81,591 sq ft distribution warehouse. These works have been completed at a cost of £500,000. The lease to EDP has therefore completed for a ten year term without break options at £450,000 per annum. The tenant receives a nine month rent free incentive.
-ENDS-
For further information:
| Schroder Real Estate Investment Management Limited: Duncan Owen / Nick Montgomery / Frank Sanderson | 020 7658 6000 |
| Northern Trust: James Machon | 01481 745529 |
| FTI Consulting: Dido Laurimore / Richard Gotla | 020 3727 1000 |
