Alternative Income REIT has paid £5m for a Volvo car showroom in Slough, Berkshire.
The off-market deal reflects a net initial yield of 5% and a discount to replacement costs.
The 15,000 sq ft showroom is let to Volvo for £270,000 pa on a lease due to expire in March 2037. The lease is subject to five-yearly, upward-only rent reviews linked to RPI.
The acquisition redeploys the net proceeds from the sale in November of Alternative Income’s Audi car showroom in Huddersfield for £5.5m, which was coming to the end of its lease.
The deal is the second introduced by M7 Real Estate as investment adviser. M7 previously introduced the acquisition of Droitwich Spa Retail Park, announced in December 2020.
Alan Sippetts, chair of Alternative Income, said that asset, “in a prime location, let to a strong tenant covenant on a long lease with index-linked rent reviews”, was a perfect fit with the REIT’s focus on indexed-linked, long-term income return.
To send feedback, e-mail piers.wehner@eg.co.uk or tweet @PiersWehner or @EGPropertyNews
