£3m investment deals in four weeks

Despite a mixed investment market, Nottingham property agent heb has bucked the trend, completing £3 million investment transactions across the East Midlands in just four weeks.
Rob Maxey of heb said that despite slow investment activity in 2011, there was still good interest for the right product.
He said: “It is very much a two-tier market.  There is still good demand for investments where there is a reasonable lease length let to a tenant with strong covenant status. If these criteria are met strong yields are still being paid.
“However, on the basis that banks aren’t lending and are trying to bring down their exposure to property if the above criteria isn’t met from our experience there is no appetite from banks to lend money – unless a significant deposit is put down.”
Last month, Rob Maxey completed the sale of Baris House, and warehouse unit with extensive offices, in Sutton-in-Ashfield for £1.25 million on behalf of a private client.  The premises comprised 22,500 sq ft and was let in its entirety to Baris Group Limited for a term of 15 years from 2008 at a passing rental of £115,000 per annum.  The deal reflected a net initial yield of 8.70%.
Also in Sutton-in-Ashfield, heb’s Matt Cullen led the sale of the Tesco convenience store in Alfreton Road in Sutton-in-Ashfield for £935,000 to clients of George Alcock at DTZ.  The premises were let to T & S Stores plc with the deal being conditional upon an assignment to their parent company Tesco Stores Ltd the overall deal reflecting a net initial yield of 6.16%.
The third deal also involved Tesco, where Tom Strawson acquired on behalf of private clients the former Market Hotel in Grimsby where a pre-let had been agreed with Tesco Stores which took a new 15 year lease with a ten year break at a rental of £49,500.
The site also included a self contained unit at a passing rent of £6,750 and the site was acquired for £550,000 with a reverse premium to Tesco of £150,000 to compensate them for the fit out of the unit.  The deal was completed within seven days of the instruction of lawyers in order to complete the deal prior to the lease kicking in with Tesco Stores Limited, thereby saving on Stamp Duty.
Finally, 81-83 Charles Street, Leicester was sold to Asiana Management LLP at heb’s December auction. This was a multi-let property in the centre of Leicester comprising two retail units to the ground floor and two self contained office suites to the upper parts.  The two upper floors are let along with one of the ground floor units with a vacant former Derbyshire Building Society on the ground floor.  The premises was sold at a price of £350,000 to an owner occupier for the vacant ground floor element, which reflected a net initial yield of 10% which will rise significantly once the ground floor vacant unit is let.
Rob added: “We had a great four weeks on these four transactions. As for 2012, I can’t see the investment market changing any time soon – unless the banks change their lending criteria on property which does not appear to be on the horizon any time soon. Therefore there will continue to be good prices achieved for well let, well secured investments with the secondary market being restricted to cash buyers at a discounted price.”