City Point sold for £26m
City Point in Leeds has been sold for £26m, two years after its owners RDI bought the 61,379 sq ft office for £21m.
RDI, the FTSE-250 income focused UK-REIT, this morning announced that it had exchanged contracts for the disposal of the office. It was originally acquired as part of the Company’s AUK Portfolio acquisition in March 2016 for an acquisition price of £21.6m with over 17% vacancy.
In January 2017, RDI let 11,000 sq ft to Blacks Solicitors LLP, bringing the asset to full occupancy. The sale price represents a net initial yield of 5.8% and a 15.3% premium to the last reported market value. The geared internal rate of return over the investment period was over 20%.
The property, which has been acquired by West Midlands Pension Fund, delivers total gross annualised rental income of £1.6m with a WAULT of 3.7 years.
The disposal is in line with RDI’s stated strategy of recycling capital out of mature assets and into new growth opportunities.
Mike Watters, chief cxecutive, said:”The disposal of City Point, Leeds represents yet another example of delivering value from the AUK acquisition.
“After two years of owning this asset, we have delivered an excellent 20.6% premium to the acquisition price, whilst also de-risking the portfolio by reducing our exposure to a maturing regional office investment market and an asset with a number of upcoming lease breaks and expiries. We are confident that the progress on our active recycling will support our relentless focus to deliver superior, sustainable and growing distributions.”
