A real estate investment trust traded on the Main Market of the London Stock Exchange

Property portfolio

Sarus Court

Runcorn

Sarus Court, Runcorn

Attractive yield, improving industrial location.

Property characteristics

Property NameUnits 1001-1004, Sarus Court, Runcorn

Property TypeIndustrial

Area56,153 sq ft

Purchase Price£3.365m

Purchase Yield8.0%

VendorProperty Company

Lease

TenantsMulti let to two tenants providing a WAULT of 3.8 years to breaks and 5.2 years to expiry

Adding value

  • The location is set to benefit from the completion of the Mersey Gateway Project in 2017 which will link Runcorn with the M56 to M62
  • The company has since acquired a further unit on the same estate, Cleaver House, to provide more efficient control of estate management

Investment Summary

  • Established industrial location
  • High quality, modern accommodation compared to the competing offer
  • Fully let

Cleaver House

Runcorn

Cleaver House, Runcorn

Attractive yield, improving industrial location.

Property characteristics

Property NameCleaver House, Sarus Court, Runcorn

Property TypeIndustrial

Area16,154 sq ft

Purchase Price£0.91m

Purchase Yield7.92%

Constructed1990’s

VendorPrivate

Lease

TenantsSingle let with an unexpired term of 5 years, 2 years to break

Adding value

  • The location is set to benefit from the completion of the Mersey Gateway Project in 2017 which will link Runcorn with the M56 to M62
  • The unit was acquired following the acquisition by the company of the wider Sarus Court estate. Cleaver House therefore assists in providing a more efficient control of estate management

Investment Summary

  • Established industrial location
  • High quality, modern accommodation compared to the competing offer
  • Fully let

Langthwaite Industrial Estate

South Kirkby

Langthwaite Industrial Estate, South Kirkby

High yielding industrial units.

Property characteristics

Property NameUnits 16 & 16a

Property TypeIndustrial

Area221,145 sq ft

Purchase Price£5.8m

Purchase Yield11%

VendorOnward Holdings

Lease

TenantsBoth units let to Ardagh Glass Ltd

Adding value

  • Negotiate a lease extension with the current tenant due to their requirement to remain within the local area

Investment Summary

  • High yielding industrial units located in Yorkshire, a short distance from the A1(M)
  • 5A1 covenant strength (D&B)
  • Strategically located for Tenant due to other nearby facilities
  • Low capital value
  • Shortage of availability in the local market

Barbot Hall Industrial Estate

Rotherham

Barbot Hall Industrial Estate, Rotherham

Single let industrial unit in established location, reversionary potential.

Property characteristics

Property NameSapa Components UK Ltd, Magham Road, Rotherham

Property TypeIndustrial

Area80,964 sq ft

Purchase Price£2.175m

Purchase Yield8.5%

VendorProperty Company

Lease

TenantsSingle let to Sapa Components UK Ltd with a WAULT of 3.1 years to expiry

Adding value

  • Reversionary potential – ERV of c.£3.25 psf
  • Negotiate lease renewal on expiry of the current lease in December 2018. Sapa are wedded to the location due to their distribution network

Investment Summary

  • Established industrial location
  • Increasing levels of occupier demand within the surrounding area
  • Lack of new development has created a shortage of competing stock
  • Strong tenant covenant
  • Low passing rent

Brightside Lane

Sheffield

Brightside Lane, Sheffield

Long income, higher alternative use potential.

Property characteristics

Property NameROM, 710 Brightside Lane

Property TypeIndustrial

Area125,938 sq ft

Purchase Price£3.5m

Purchase Yield8.3%

Constructed1960’s

VendorProperty Company

Lease

TenantsSingle let for a further 14.8 years with a tenant break option in 9.8 years

Adding value

  • Potential to increase rent at review
  • Potential for medium to long term redevelopment for higher value uses including trade counter and motor dealership

Investment Summary

  • Prominent frontage to busy arterial route
  • Tenant wedded to the location having significantly invested in the roof
  • Low capital value psf and low passing rent
  • Long term income
  • Surrounding sites currently being redeveloped for higher value uses

Oak Park

Droitwich

Oak Park, Droitwich

Industrial complex let to a strong covenant.

Property characteristics

Property NameTaylor Bins Droitwich

Property TypeIndustrial

Area188,515 sq ft

Purchase Price£5.625m

Purchase Yield10.4%

VendorReceivership sale

Lease

TenantsSingle let to Taylor Bins (trading name) providing a WAULT of 7 years expiry

Adding value

  • Investment value strongly underpinned by underlying site value
  • Potential future change of use to residential subject to planning

Investment Summary

  • Established industrial location
  • Fully let to a strong covenant
  • Attractive WAULT
  • High yielding and stable income stream

Carrs Coatings

Redditch

Carrs Coatings, Redditch

Established industrial location, strong tenant demand.

Property characteristics

Property NameCarrs Coating, North Moons Industrial Estate, Redditch

Property TypeIndustrial

Area37,833 sq ft

Purchase Price£2.0m

Purchase Yield9.5%

VendorProperty Company

Lease

TenantsCarrs Coatings Limited 13 years unexpired

Adding value

  • The lease provides for annual RI uplifts
  • Strong demand from owner occupiers within the wider area due to lack of supply

Investment Summary

  • Attractive initial yield
  • Long income providing annual fixed uplifts in line with RPI
  • Located within a very well established industrial location
  • Purchase price c 85% underpinned by vacant possession value

Cranbourne House

Basingstoke

Cranbourne House, Basingstoke

Modern, single let industrial unit in prime South East location.

Property characteristics

Property NameCranbourne House, Basingstoke

Property TypeIndustrial

Area58,445 sq ft

Purchase Price£3.4m

Purchase Yield10%

VendorProperty Company

Lease

TenantsFully let to Wella UK Holdings Ltd with a WAULT of 2 years to break and 4 years to expiry

Adding value

  • Remove break option to add value through yield compression
  • Negotiate lease renewal with the current tenant
  • Should Wella vacate – relet the unit on a new 5 year term at ERV

Investment Summary

  • Established South East industrial location
  • Modern accommodation
  • Increasing levels of occupier demand
  • Lack of new development
  • Strong tenant covenant

Wagon Road

Mossley

Wagon Road, Mossley

Income longer than fund level WAULT, strong covenant.

Property characteristics

Property NameNCRC Waggon Road, Mossley

Property TypeIndustrial

Area12,836 sq ft

Purchase Price£275,000

Purchase Yield11.1%

Constructed1980’s

VendorPrivate

Lease

TenantsSingle let with an unexpired term of 7.3 years. Secured against National Crash Repair Centre Ltd

Adding value

  • The current lease provides a strong income stream

Investment Summary

  • Strong covenant
  • Income longer than fund level WAULT
  • Well located a short distance from the M60 Manchester Ring Motorway

NCRC Clarke Road

Milton Keynes

NCRC Clarke Road, Milton Keynes

Income longer than fund level WAULT, strong covenant.

Property characteristics

Property NameNCRC Clarke Road, Milton Keynes

Property TypeIndustrial

Area28,348 sq ft

Purchase Price£1.53m

Purchase Yield7.66%

Constructed1980’s

VendorPrivate

Lease

TenantsSingle let with an unexpired term of 7.3 years. Secured against National Crash Repair Centre Ltd

Adding value

  • The current lease provides a strong income stream

Investment Summary

  • Strong covenant
  • Income longer than fund level WAULT

Moorside Road

Swinton

Moorside Road, Swinton

Income longer than fund level WAULT, strong covenant.

Property characteristics

Property NameNCRC Moorside Road, Swinton

Property TypeIndustrial

Area24,307 sq ft

Purchase Price£1.28m

Purchase Yield7.64%

Constructed2010

VendorPrivate

Lease

TenantsSingle let with an unexpired term of 7.3 years. Secured against National Crash Repair Centre Ltd

Adding value

  • The current lease provides a strong income stream

Investment Summary

  • Strong covenant
  • Income longer than fund level WAULT
  • Well located a short distance from the M60 Manchester Ring Motorway
  • Modern building

Lea Green Industrial Estate

St Helen's

Lea Green Industrial Estate, St Helen's

Single let industrial unit, long term income stream.

Property characteristics

Property NameWalkers Lane, St Helens

Property TypeIndustrial

Area93,114 sq ft

Purchase Price£3.175m

Purchase Yield8.24%

VendorProperty Company

Lease

TenantsSingle let to Kverneland Group UK Ltd with a WAULT of 9.8 years to expiry with no break option

Adding value

  • Minimal asset management required due to long lease
  • Some reversionary potential at review. ERV of £3.50 psf

Investment Summary

  • Established industrial location
  • New lease to embedded tenant
  • Attractive WAULT
  • Strong tenant covenant

Equinox

Salisbury

Equinox, Salisbury

High yielding industrial investment

Property characteristics

Property NameEquinox unit

Property TypeIndustrial

Area43,207 sq ft

Purchase Price£2.0m

Purchase Yield11.3%

VendorStandard Life

Lease

TenantsEquinox International Ltd

Adding value

  • Designed to allow easy subdivision to create a multi let terrace leading to increase in ERV
  • Adjoining residential land uses create long term higher alternative use value, subject to planning

Investment Summary

  • Modern single let industrial warehouse
  • Attractive yield profile
  • Embedded tenant – the building was purpose built in 1996
  • Low capital value per sq ft

Brockhurst Crescent

Walsall

Brockhurst Crescent, Walsall

Three fully industrial units, strategically located near the M6

Property characteristics

Property NameBrockhurst Crescent, Walsall

Property TypeIndustrial

Area137,106 sq ft

Purchase Price£3.85m

Purchase Yield9.9%

VendorProperty Company

Lease

TenantsMulti-let to Tata Steel and Micheldever Tyres providing a WAULT of 6.4 years expiry

Adding value

  • Fixed rental uplifts in 2017 taking the running yield to 11.0%
  • Opportunity to negotiate a reversionary leave with an existing tenant to extend the income

Investment Summary

  • Established industrial location just off the M6 at Junction 9
  • Fully let
  • Attractive net initial yield
  • Shortage of low rented industrial accommodation within the surrounding area

Advanced Supply Chain

Bradford

Advanced Supply Chain, Bradford

Property characteristics

Property NameAdvanced Supply Chain

Property TypeIndustrial

Area114,000 sq ft

Purchase Price£4.95m

Purchase Yield8.1%

VendorProperty Company

Lease

TenantsSingle let with unexpired term of 8 years

Adding value

  • Shortage of supply in local market
  • Passing rent below ERV

Investment Summary

  • Established industrial location
  • Just off national motorway network
  • Fully let

40 Queen Square

Bristol

40 Queen Square, Bristol

Prime Bristol Office Location, refurbishment potential.

Property characteristics

Property Name40 Queen Square, Bristol

Property TypeOffice

Area36,365 sq ft

Purchase Price£7.2m

Purchase Yield8.7%

VendorFund

Lease

TenantsMulti-let to 6 tenants with 46% vacancy in terms of floor area. WAULT of 1.5 years to break and 3.2 years to expiry

Investment Summary

  • Prime office location in central Bristol
  • Increasing levels of occupier demand is driving rental growth
  • Asset management opportunities – regear of existing leases and refurbish vacant space

Sandford House

Solihull

Sandford House, Solihull

Prime office location, tenant wedded to the location.

Property characteristics

Property NameSandford House, Solihull

Property TypeOffice

Area34,418 sq ft

Purchase Price£5.4m (£157 psf)

Purchase Yield10.9%

Constructed1988

VendorFund

Lease

TenantsGovernment tenant with 1.8 years to break and 4.5 years to expiry

Adding value

  • Potential to regear the lease with the current tenant
  • Refurbishment potential in the short term could increase rental value
  • Ability to extend the building, subject to planning

Investment Summary

  • Prime Birmingham office location
  • Significant improvement in occupier demand over the past 2 years
  • Government tenant is strongly wedded to the location – Border Force have disclosed a new requirement but are very unlikely to move before break date
  • Potential to refurbish in the short to medium term to increase rental value

Eastpoint Business Park

Oxford

Eastpoint Business Park, Oxford

Major south east city, improving occupier demand.

Property characteristics

Property NameEastpoint Business Park

Property TypeOffice

Area74,823 sq ft

Purchase Price£8.2m (£110 psf)

Purchase Yield9.4%

Constructed1980’s

VendorProperty company

Lease

Tenants5 tenants providing a WAULT of 6 years to break and 7.9 years to expiry

Adding value

  • Letting of vacant accommodation (12 month vendor guarantee on rent and shortfalls)
  • Capital expenditure of £160,000 spent refreshing vacant accommodation
  • Marketing campaign now relaunched quoting £15.50 psf, ahead of acquisition ERV of £14.50
  • Application for conversion to residential under Permitted Development Rights has been submitted

Investment Summary

  • Majority refurbished office park with good road links
  • Constrained supply and improving occupier demand in a key south east location
  • Low capital value psf

Vantage Point

Hemel Hempstead

Vantage Point, Hemel Hempstead

Low capital value psf, strong and improving occupier market.

Property characteristics

Property NameVantage Point

Property TypeOffice

Area18,407 sq ft

Purchase Price£2.175m

Purchase Yield8.4%

Constructed1980

VendorPrivate vendor

Lease

TenantsFully let to 2 tenants providing a WAULT of 5 years to breaks and 9.4 years to expiry

Adding value

  • Refurbishment potential if the first floor tenant breaks their lease and in the medium term. ERV could increase to £15 psf on refurbished accommodation

Investment Summary

  • Established south east business park location
  • Strong south east office occupational market
  • Low passing rent
  • Low capital value psf

Bath Street

Glasgow

Bath Street, Glasgow

City centre location, attractive yield profile

Property characteristics

Property Name225 Bath Street

Property TypeOffice

Area87,827 sq ft

Purchase Price£12.2m (£139 psf)

Purchase Yield10.0%

Constructed1980’s

VendorFund

Lease

TenantsFully let to 7 tenants providing a WAULT of 2.3 years to breaks and 4.5 years to expiry

Adding value

  • The current low passing rents make the building well placed to benefit from future rental growth
  • Requires minimal capex going forward, eg. Improvement of tenant amenity space on the ground floor

Investment Summary

  • Multi-let city centre office building
  • Comprehensively refurbished in 2008
  • Shortage of competing stock for this size of floor plate

Barnstaple Retail Park

Barnstaple

Barnstaple Retail Park, Barnstaple

Fully let on rebased rents, established location.

Property characteristics

Property NameBarnstaple Retail Park

Property TypeRetail

Area51,012 sq ft

Purchase Price£6.79m

Purchase Yield8.7%

Constructed1988

VendorGuy & St Thomas’ Charitable Foundation

Lease

TenantsB&Q, Sports Direct and Poundland

Adding value

  • Low base rents could create potential for future rental growth

Investment Summary

  • Retail warehousing scheme located within an established destination area
  • Fully let to national occupiers on rebased rents
  • Average weighted unexpired term of 8.6 years
  • Attractive and stable yield profile

Fargate

Sheffield

Fargate, Sheffield

Prime retail location, attractive yield profile.

Property characteristics

Property Name11-15 Fargate and 18-36 Chapel Walk

Property TypeRetail

Area40,128 sq ft

Purchase Price£5.3m

Purchase Yield8.7%

VendorFund

Lease

TenantsMulti let to 7 tenants providing a WAULT of 3.8 years to breaks and 5.3 years to expiry

Investment Summary

  • Prime retail location within Top 25 retailing city
  • Potential to add value through letting of vacant units and sale of upper parts
  • Low passing rent on the prime units
  • Further retail development nearby will help to draw more footfall into the city centre

Above Bar Street

Southampton

Above Bar Street, Southampton

Top 20 retailing centre, improving occupier demand.

Property characteristics

Property NameAbove Bar street

Property TypeRetail

Area27,247 sq ft

Purchase Price£9.25m (£339 psf)

Purchase Yield8.75%

Constructed1993

VendorFund

Lease

TenantsFully let to 3 tenants providing a WAULT of 6.8 years to expiry

Adding value

  • Potential to increase rental value in the medium term due to rental growth within the wider area

Investment Summary

  • Top 20 retail centre
  • Property located just a short walk from the prime pitch and between the two main covered centres
  • Improving occupier demand and potential for rental growth going forward

Stoneferry Retail Park

Hull

Stoneferry Retail Park, Hull

Prominent location, attractive yield.

Property characteristics

Property NameStoneferry Retail Park

Property TypeRetail

Area17,656 sq ft

Purchase Price£2.16m (£122 psf)

Purchase Yield10%

Constructed1994

VendorFund

Lease

TenantsFully let to 3 tenants providing a WAULT of 6.9 years to expiry

Adding value

  • Potential to agree a surrender with Wren Kitchens if an alternative tenant can be found
  • Improve signage and access

Investment Summary

  • Good prominence to a major roundabout junction
  • Established retail warehousing location
  • Attractive and stable yield profile in medium to long term

Wheeler Gate

Nottingham

Wheeler Gate, Nottingham

Major city centre location, high passing footfall.

Property characteristics

Property NamePearl House, Nottingham

Property TypeRetail

Area71,260 sq ft

Purchase Price£8.15m

Purchase Yield9.0%

VendorProperty Company

Lease

TenantsMulti let to 15 tenants with a vacancy level of 16% WAULT of 4.7 years to break and 5.4 years to expiry 50% of the income from national retailers including Poundland, Costa Coffee and Lakeland

Adding value

  • Letting of vacant accommodation – offers have been received from prospective tenants in respect of all vacant accommodation
  • Complete office lease renewals. Various tenants have renewal leases in solicitors hands
  • Change of use of the larger floor plate office accommodation to a gym, subject to planning
  • Potential to sell off the office floors for change of use in the longer term, subject to planning

Investment Summary

  • Major city centre retail pitch with high footfall
  • Well configured retail units
  • Office upper floors providing potential for a range of alternative uses

Bank Hey Street

Blackpool

Bank Hey Street, Blackpool

Strong tenant covenants, asset management opportunities.

Property characteristics

Property NameBank Hey Street, Blackpool

Property TypeRetail

Area100,079 sq ft

Purchase Price£5.05m

Purchase Yield9.5%

VendorProperty Company

Lease

TenantsMulti-let to JD Wetherspoon, Poundland and Sports Direct WAULT of 7.8 years to break and 10.3 years to expiry

Adding value

  • Sell-off upper parts (no rates liability) on a long-leasehold basis. An offer has been received from a hotel operator to take a long leasehold interest over the entire upper floors in their current condition
  • Existing tenants are also interested in expanding within the building

Investment Summary

  • Iconic location directly adjacent to the Blackpool Tower
  • Blackpool has seen a resurgence in visitor numbers to 13 million in 2014
  • Attractive net initial yield
  • Tenants reporting very strong trade

Valley Retail Park

Belfast

Valley Retail Park, Belfast

Modern scheme, attractive yield profile

Property characteristics

Property NameValley Retail Park, Newtownabbey

Property TypeRetail

Area100,413 sq ft

Purchase Price£7.1m (£71 psf)

Purchase Yield12.8%

Constructed2003

VendorAsset Manager

Lease

TenantsLet to 4 tenants providing a WAULT of 3.5 years to breaks and 7 years to expiry

Investment Summary

  • Modern scheme
  • Attractive yield profile
  • Low vacancy level within the surrounding area
  • Ability to offer space at a discount to surrounding schemes
  • Halfords trading strongly
  • Wider interpretation of bulky goods planning consent than rest of UK

Odeon Cinema

Southend

Odeon Cinema, Southend

Prominent south east town centre location, strong underlying trade.

Property characteristics

Property NameOdeon Cinema, Victoria Circus, Southend on Sea

Property TypeOther

Area40,635

Purchase Price£5.7m

Purchase Yield8.4%

VendorInstitution

Lease

TenantsFully let to Odeon Cinemas Ltd for a further 6 years

Adding value

  • Instigate outstanding rent review to improve returns
  • Negotiate lease extension with the tenant. Potential to add significant value through indexation

Investment Summary

  • Prominently located on the High Street and a short distance from the train station
  • Only cinema within 25 minute drive time
  • 5A1 covenant strength (D&B)
  • Tenant trading strongly
  • Reversionary potential
  • Attractive yield and stable income stream

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AEW UK REIT plc

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