AEW UK REIT plc (“the Company”), which directly owns a diversified portfolio of regional UK commercial property assets, has announced the acquisition of Cedar House, Spa Road, Gloucester for £3.1m.
The five-storey office block, which is located within the city centre adjacent to Gloucester Park, has been acquired for a price reflecting a low capital value of only £80 per sq ft and an attractive net initial yield of 9.1%. The property is currently let to the Secretary of State for Communities & Local Government for use as a Job Centre, with a short unexpired lease term of 0.3 years. However, the tenant has already served a Section 26 notice to renew the lease and as such the Investment Manager believes that the income can be extended.
The property is situated within a mixed office and residential area and as such the Investment Manager believes that it provides good long-term alternative use potential. Public transport is easily accessible, with good links to Gloucester Railway Station and a central bus route.
The asset provides a total floor area of 38,427 sq ft and includes substantial car parking facilities, with 103 spaces available.
Alex Short, Portfolio Manager, AEW UK REIT, commented: “We are delighted to have completed this latest acquisition following our successful capital raise in October. Heading into 2018, we are pleased to have an attractive pipeline of investment opportunities ahead of us and with further assets under offer we expect to make more acquisition announcements shortly.”
On 20 October AEW UK REIT announced that it had raised £28.1m through the initial issue of the Share Issuance Programme, as described in the prospectus published by the Company on 28 September 2017.