Newly-formed Life Science REIT has continued its buying spree with properties in Oxford and Cambridge.
The REIT has bought Lumen House on the Harwell Science and Innovation Campus, near Oxford, for £7m. The 18,000 sq ft, 950-years-plus long leasehold, represents a net initial yield of 4.4%.
It is currently let to a single tenant at around £330,000pa. However, the lease is due to expire within 18 months, giving Life Science an opportunity to drive up the rent.
The REIT has also bought the Merrifield Centre in Cambridge for £4.8m. The purchase price represents a net initial yield of 5.9%.
The 12,000 sq ft of office and lab space to the east of Cambridge city centre is 100% let to two tenants working in drug discovery. The property currently generates around £290,000 of rent a year, equivalent to £23 per sq ft, and has an unexpired lease term of 10 years.
Both properties are part of the pipeline of assets referenced in the IPO prospectus of the Life Science REIT, which raised £350m at its launch.
Simon Farnsworth, managing director of Ironstone Asset Management, the REIT’s investment adviser, said: “The Merrifield Centre is a quality property with attractive income in the heart of the Cambridge science and technology hub. Its acquisition by Life Science REIT is in line with our strategy of creating a diverse portfolio of properties focused on the Golden Triangle of Oxford, Cambridge and London St Pancras.”
Last week the REIT bought Rolling Stock Yard, N7, near St Pancras Station for £77m.
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