F&C Reit Asset Management has sold seven retail properties for more than £12m from the £600m Dawnay Day portfolio it bought in March.
The retail units, which were sold to private buyers either through private treaty or auction, consist of more than 20,000 sq ft of Zone A and office space in total.
The properties are:
- 17 James Street in Harrogate which is a 3,186 sq ft store let To Bradford & Bingley until 2021 and was sold for £1.7m at a yield of 4.75%;
- A 1,212 sq ft unit at 64 High Street in Guildford let to Mobiles Phones Direct until 2018. This was sold for £1.3m at a yield of 4.85%;
- 48 Albion Street in Leeds which is a 1,010 sq ft store let to Starbucks until 2025 and was sold for £3.1m at a yield of 6.00%;
- 131-133 High Street in Sevenoaks was sold for £1.6m at a yield of 5.79%. The 3,270 sq ft (303.78 sq store is let to WH Smith until 2017;
- 18 Union Street in Bath was sold for £1.3m at a yield of 5.5%. Tie Rack occupies the 1,867 sq ft store on a lease that expires in 2017;
- The 4,541 sq ft store at 22/23 Commercial Street in Newport Gwent is let to the Woolwich (Barclays) until 2020 and sold for £1.9m to show a 6.5% yield;
- 119/119A High Street, Newport, Isle of Wight comprises 5,806 sq ft of space let to Cheltenham & Gloucester and two floors of office space totalling 3,472 sq ft was sold for £1m at a 6.25%
F&C REIT said that the sales had ‘set new levels for the market at this stage of the cycle indicating a possible upswing in values in retail shops investments’.
The disposals follow plans announced two weeks ago by F&C Reit of a £300m opportunities fund launch for distressed commercial property assets.
Kevin McGrath, managing director of F&C Reit, said: ‘We identified these retail units as those that would provide a good return due to the location and size and felt that they would be attractive in the current market to buyers. We have had a fantastic response and on some of these properties,
'Harrogate in particular, we received a yield that is approaching 2007 peak levels.
'These sales have proved that the market for retail investment is much stronger than the market, the banks and valuers currently perceive it to be.’
Smith Price acted for F&C REIT Asset Management