Office building sold to university in £8.8m deal

Sheffield Hallam University has acquired an office building in an £8.8m deal.

London and Scottish Property Investment Management acted on behalf of Regional REIT to sell Aspect Court at Pond Hill, in a deal which reflects a net initial yield of 6.6%.

The sale price marks an uplift of 39.7% since acquisition and 24.8% against the 31 December 2018 valuation.

The property was purchased in 2016 for £6.3m following which various asset management initiatives were undertaken, increasing the length of leases and rental income.

The total rental income for the property has increased to £620,000, representing an uplift of around 18% from acquisition.

The proceeds from the sale will be “rapidly deployed towards the group’s considerable pipeline of opportunities”, London & Scottish Property Investment Management said.

Stephen Inglis, chief executive of London & Scottish Property Investment Management, said: “Following completion of the business plan for this building, we have agreed a sale to Sheffield Hallam which already occupies the building for academic accommodation. Over the past three years under Regional REIT’s management, we have re-geared leases, taken back and re-let several floors resulting in increasing the lease length and rental income.

“This has resulted in the group achieving a substantial premium of 25% over the December 2018 valuation.

“The company has a very substantial pipeline of potential acquisitions and we have already identified and agreed terms to recycle the capital achieved from this sale.”