AEW UK REIT Plc completes sale of 225 Bath Street, Glasgow

AEW UK REIT plc has announced that it has now completed on the sale of its holding at 225 Bath Street, Glasgow for the price of £9,300,000.

The sale realises a long-term change of use strategy for the asset with contracts for the sale having been exchanged with a subsidiary company of IQ Student Accommodation in October 2020. As stated in AEWU’s announcement on 11 February 2022, planning consent has been gained by IQ for the demolition of the property and development of a 527-unit student accommodation scheme.

The sale agreement required AEWU to negotiate with tenants to bring the asset to vacancy and, as a result, following its sale the occupancy rate for AEWU’s remaining portfolio will increase to 91.60% from 86.97% as at 30 June 2022. Reinvestment of the sale proceeds into pipeline assets under exclusivity is expected to provide a significant boost to the Company’s earnings due to both higher levels of anticipated income receipts and lower running costs.

Laura Elkin, Portfolio Manager, AEW UK REIT plc, commented: “As the culmination of a long running business plan, we are delighted to see this sale complete. The disposal not only maximises the value of the asset but will increase occupancy levels across the remaining portfolio, reduce running costs and boost earnings, once capital is reinvested. The proceeds from the sale are already under offer to assets in exclusivity and, as such, we expect to make further purchase announcements in the coming weeks.”