RDI Reit sells off City Point for £26.05 million

RDI Reit sells off City Point for £26.05 million

JSE-listed RDI REIT Plc said it has exchanged contracts for the disposal of City Point in Leeds for £26.05 million.

The City Point is a 5,699 sqm (61,379 sqft) office was originally acquired as part of the Company’s AUK Portfolio acquisition in March 2016 for an acquisition price of £21.6 million with over 17% vacancy.

The said in January 2017, RDI let 1,022 sqm (11,000 sqft) to Blacks Solicitors LLP, bringing the asset to full occupancy. The sale price represents a net initial yield of 5.8% and a 15.3% premium to the last reported market value.

The geared internal rate of return (‘IRR’) over the investment period was over 20%. The property, which has been acquired by West Midlands Pension Fund, delivers total gross annualised rental income of £1.6 million with a WAULT of 3.7 years. The disposal is in line with RDI’s stated strategy of recycling capital out of mature assets and into new growth opportunities.

Further details on the Company’s progress against strategic priorities will be provided in its interim results which will be announced on Wednesday, 25 April 2018. Mike Watters, Chief Executive, commented: “The disposal of City Point, Leeds represents yet another example of delivering value from the AUK acquisition. After two years of owning this asset, we have delivered an excellent 20.6% premium to the acquisition price, whilst also de- risking the portfolio by reducing our exposure to a maturing regional office investment market and an asset with a number of upcoming lease breaks and expiries.

We are confident that the progress on our active recycling will support our relentless focus to deliver superior, sustainable and growing distributions.”