Government department commits to Solihull with 15-year office deal

A government department has committed its future to Solihull after renewing its lease on a 34,000 sq ft office building in the town.

The Secretary of State for Communities and Local Government has agreed a 15-year extension to its lease with AEW UK REIT to stay in Sandford House.

For AEW UK REIT, the deal means a 30% hike in rental income from the property. The government department has also agreed to undertake a major refurbishment of the office space over coming weeks.

Alex Short, portfolio manager of AEW UK REIT, said: “We are delighted to have secured this highly profitable lease renewal that crystalises both income growth and value creation for the company’s investors.

“The conclusion of this business plan at the current time, following on from the sale of Corby announced in May, both highlight the durability of the company’s strategy in seeking to acquire assets whose pricing is misaligned with their long-term fundamental value.

“We continue to look for attractive purchasing opportunities that will deliver robust returns to our shareholders through the active management of our properties.”