Picton offloads warehouse to mystery buyer for £2.2m
Picton, the income focused property investment company, has disposed of a warehouse in Oldham for £2.2m to an undisclosed buyer.
The warehouse on Drury Lane was bought in April, 2010 for £0.4m with an annual rent of £74,000 as part of the acquisition of Rugby REIT.
During Picton’s ownership, it secured planning consent to change the use from industrial to leisure, completed a full refurbishment, acquired adjacent land for car parking and subsequently let the transformed asset to The Gym Group until 2031 at an annual rent of £150,000.
The sale price reflects a net initial yield of 6.4% and a 10% premium to the 31 December 2016 external valuation. Net of the £0.8m of costs incurred since acquisition, the asset was sold at an 80% profit.
Michael Morris, chief executive of Picton Capital, said: “This is a good example of how we used our knowledge of the local market and asset management expertise to double the income and capture a significant increase in value.
“The proceeds can be used, together with existing funds, to opportunistically acquire assets in larger lot sizes that we believe will generate attractive future returns.”
