News

AEW offloads slice of Coventry retail park

News

Samantha McClary

16 December 2024

Retail

West Midlands

AEW UK REIT has sold a collection of stores at Central Six retail park in Coventry for £26.2m – a 7.49% yield.

The sale price represents a capital value of £213 per sq ft and a 60% premium to the purchase price of the entire property, which was acquired in November 2021 for £16.4m.

Excluding the remaining part of the retail park, known as the “triangle site”, which AEW plans to retain, the sale is expected to deliver an IRR in excess of 16%.

Henry Butt, director at AEW UK REIT, said: “As a result of our active asset management strategy, we have sold part of this asset at a very healthy premium to the purchase price of the whole, thereby delivering excellent returns to the company’s shareholders.

“The value created by our successful asset management presents an opportunity to crystallise capital growth and reinvest the sale proceeds into higher yielding opportunities in the market. A significant part of the proceeds from the sale are already under offer and, as such, we expect to make purchase announcements in the coming months.”

AEW said it had completed a number of new deals across the Central Six retail park over recent weeks including three new lettings to Aldi, Iceland and Whitecross Dental Care, which added £668,000 of annual rent, and a deal with Superdrug to take over unit 10 on the site from Tui. Unit 10 sits within the sold part of the retail park.

The agreement for lease with Superdrug is conditional on the works being carried out by Tui, vacant possession and a capital contribution of £31,000 from AEW. Once the conditions have been satisfied, Superdrug will enter into a new 10-year lease, with a tenant-only break option in year five, at a rent of £158,760 per annum. The letting includes a 12-month rent-free incentive.

AEW has also agreed to lease a store in its retained triangle site to Tui on a new five-year lease, with a tenant-only break option in year three, at a rent of £75,000 per annum. The letting includes a six-month rent-free incentive effective from 1 July 2025 and a tenant break option penalty equivalent to 12 months’ rent.

Send feedback to Samantha McClary

Follow Estates Gazette

AEW UK

AEW UK REIT has sold a collection of stores at Central Six retail park in Coventry for £26.2m – a 7.49% yield. The sale price represents a capital value of £213 per sq ft and a 60% premium to the purchase price of the entire property, which was acquired in November 2021 for £16.4m. Excluding the remaining part of the retail park, known as the “triangle site”, which AEW plans to retain, the sale is expected to deliver an IRR in excess of 16%. Henry Butt, director at AEW UK REIT, said: “As a result of our active asset management strategy, we have sold part of this asset at a very healthy premium to the purchase price of the whole, thereby delivering excellent returns to the company’s shareholders. “The value created by our successful asset management presents an opportunity to crystallise capital growth and reinvest the sale proceeds into higher yielding opportunities in the market. A significant part of the proceeds from the sale are already under offer and, as such, we expect to make purchase announcements in the coming months.” AEW said it had completed a number of new deals across the Central Six retail park over recent weeks including three new lettings to Aldi, Iceland and Whitecross Dental Care, which added £668,000 of annual rent, and a deal with Superdrug to take over unit 10 on the site from Tui. Unit 10 sits within the sold part of the retail park. The agreement for lease with Superdrug is conditional on the works being carried out by Tui, vacant possession and a capital contribution of £31,000 from AEW. Once the conditions have been satisfied, Superdrug will enter into a new 10-year lease, with a tenant-only break option in year five, at a rent of £158,760 per annum. The letting includes a 12-month rent-free incentive. AEW has also agreed to lease a store in its retained triangle site to Tui on a new five-year lease, with a tenant-only break option in year three, at a rent of £75,000 per annum. The letting includes a six-month rent-free incentive effective from 1 July 2025 and a tenant break option penalty equivalent to 12 months’ rent.