Property investor acquires Worcester retail unit in £5.5m deal

A large retail unit in Worcester city centre has been acquired in a deal worth more than £5.5m.

Property investor Custodian REIT has purchased the unit in High Street let to Superdrug.

The property comprises a ground floor sales unit with upper floor ancillary accommodation. Nearby shops include Boots, Marks & Spencer, Debenhams, TK Maxx, and Paperchase.

The tenant’s lease expires on March 24, 2027 with a current passing rent of £384,270 per annum, reflecting a net initial yield of 6.50%.

The agreed purchase price of £5.54m is being funded from the trust’s existing cash resources, resulting in net gearing increasing to 20.4% loan to value.

Richard Shepherd-Cross, managing director of Custodian Capital – the company’s discretionary investment manager, said: “Prime retail in strong city centre locations can show good value in the current market.

“Worcester city centre offers the dominant retail in an affluent catchment area and Superdrug appear committed to the location. The unexpired lease term of over nine years adds secure income to the portfolio and the upper floors, though currently demised to the tenant, provide an opportunity to drive additional future value.”