(Alliance News) - AEW UK REIT PLC on Monday said it completed the sale of its freehold high-street retail holding in Portsmouth, England.
The real estate investment trust said the GBP3.9 million sale of the holding at 208-220 Commercial Road and 7-13 Crasswell Street reflected a net initial yield of 9.9% and a capital value of GBP251 per square feet. It didn't name the buyer of the property.
AEW UK said that the sale price represented a 22% premium to the June 30 valuation of GBP3.2 million. The property is now fully let, and this, "coupled with the risk of the main tenant, Nationwide Building Society, being significantly overrented, promoted the decision to sell".
AEW UK expects the value of the asset to deteriorate as Nationwide's lease becomes shorter, with the threat of the tenant leaving in 2029 when the contract expires creating the possibility of a long-term void.
"We are pleased to have sold this holding for a healthy premium to valuation, having completed the asset management strategy, and therefore maximised value. Going forward, the asset presents a potential risk to the company's shareholders, which further justifies a sale at this point in time," said Laura Elkin, portfolio manager of AEW UK REIT.
AEW UK REIT shares were 1.9% lower at 97.69 pence each on Monday morning in London.
By Tom Budszus, Alliance News reporter
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Aew Uk Reit (AEWU)