Cookie Error:

Cookies deactivated. To use all functions on this portal, for example the login, Cookies must be activated. Please activate Cookies in your browser settings.

News » UK
    Print Print 

AEW UK REIT signs 15-year lease renewal for Solihull Office

AEW UK REIT to announce that the Secretary of State for Communities and Local Government has renewed its lease agreement on the Company’s premises at Sandford House, Solihull.

The new 15-year lease agreement increases the rental income that the company will receive from the property by 30% and is also expected to result in a significant value increase for the asset when the portfolio is revalued at the end of this month. Throughout its hold period, the company has so far received a net income yield from the asset in excess of 9% against its purchase price of £5.4 million.

The Secretary of State has occupied the entirety of Sandford House throughout the period of the company’s ownership which commenced in July 2015. Under the new lease agreement, the 33,954 sq. ft. property has been let for 15 years with five yearly open market rent reviews and a tenant break option at year 10. The tenant intends to carry out a major refurbishment of the property over coming weeks requiring no capital payment by the company either by way of refurbishment cost or capital incentive to the tenant. In addition, no rent-free incentive has been granted to the tenant.

The property occupies a prime location in the centre of Solihull, close to its main train station and town centre. Its neighbours include the National Grid, John Lewis, West Midlands Police, Waitrose and Paragon Bank.

Commenting on the agreement, 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.”
Print Article