RDI REIT has bought an 80% stake in a £162m four-strong portfolio of central London flexible offices from Forum Partners, Kailong Group and Office Space in Town.
The income-focused REIT, formerly Redefine, has acquired an interest in four properties located on St Dunstan’s, EC3; Boundary Row, SE1; Little Britain, EC1; and New Broad Street, EC2.
The acquisition was funded by £73.5m of existing debt facilities and £72.5m of equity in a “timely and efficient reinvestment of the majority of the proceeds” from the recent disposal of the German supermarket portfolio.
RDI has formed a strategic partnership with OSIT which will continue as the operator of the portfolio and retain a 20% stake.
Mike Watters, chief executive of RDI said: “The long-term market outlook for the flexible office sector remains extremely positive, with structural and behavioural change driving the momentum behind strong occupier demand.
“Our detailed analysis of the market suggests that this sector is resilient and well-positioned to withstand any market uncertainty.
“One of the many benefits of our diversified portfolio strategy is that it provides us with the ability and agility to invest across sectors where we see the best growth prospects.
“Given our experience with our hotel portfolio, we are confident in investing in operational real estate, as well as collaborating and aligning interests with high quality operational partners.
“This earnings accretive acquisition enhances our exposure to areas of long-term economic growth and supports our strategic priority of buying and owning assets with strong property fundamentals in order to continue delivering superior, sustainable and growing income returns.
“Furthermore, and in line with our strategy to reduce leverage, this portfolio is currently financed at 45% LTV, which is at the lower end of our medium-term target of between 45% and 50%.
“Our medium-term target of delivering between 3% and 5% growth in underlying earnings per share remains unchanged.”
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