Johannesburg – London- and Johannesburg-listed Redefine
International has sold 201 Deansgate in Manchester for £29.15 million, or about
R492 million.
The FTSE 250 income-focused UK-REIT says in a statement
issued on Tuesday that the office block was originally acquired as part of the
AUK Portfolio in March 2016.
The sale price represents a net initial yield of 3.6
percent and a 14.3 percent premium to the last reported book value. The geared
IRR over the investment period was 22 percent.
CEO Mike Watters says, "the disposal of 201
Deansgate represents yet another significant value enhancing opportunity that
the AUK Portfolio offers the company. After less than a year of ownership, we
have delivered an excellent 14.3 percent premium to book value on behalf of our
investors, whilst also de-risking the portfolio from a number of upcoming lease
breaks due on the property.
“The proceeds from the disposal will be put towards
reducing debt on favourable terms."
Read also: Redefine wraps up sale of German office portfolio
The property, which has been acquired by Aviva Investors,
acting on behalf of Essex County Council, provides 7 776 m2 of office space and
delivers annual net rental income of £1.1 million with a WAULT of 4.1 years.
The proceeds from the sale will be used to fund the
refinancing and extension of certain of the company’s debt facilities.
Terms have been agreed to extend the term of certain debt
facilities with the company contributing about £25million of equity to reduce
the loans.
“The improvement to the terms of the debt facilities will
deliver an attractive return on the equity contribution of approximately 10
percent per annum,” it says.
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