A London property investor has recognised the potential of Nottingham after buying a prominent interlinked unit in the city in a deal brokered by commercial property agency Phillips Sutton Associates.
Phillips Sutton Associates acted on behalf of M7 Real Estate on its £3.25m acquisition of the Tesco store in Long Row and the NHS Walk-In Centre and offices of UPS on Upper Parliament Street in Nottingham city centre. The building covers an area of 30,701 sq ft.
The deal reflected a net initial yield of 16 per cent.
Sam Sutton, director of Phillips Sutton Associates, said: “These properties had been on the market for some time and we knew they would be a good investment for the right partner.
“Both units are well-located; Tesco has an open RPI rent review provision which made it attractive, and is a busy store in a good location.
“Meanwhile, the NHS Walk-In Centre is incredibly popular and includes a vacant retail unit to let and other asset management opportunities available which made it attractive to our client.
“With significant yield compression in London and the South, investors are turning to the regions to get a better return on their investment, which can only be good for our local economy.”
John Murnaghan, Head of UK Asset Management at M7 Real Estate said: “We are currently at advanced stages of crystallising the substantial asset management potential offered by this asset, which sits within a strong and proven location. The full range of our skillset will be put to work to unlock the latent value in this asset, including development works, lease restructures and incentives.
“This transaction reflects the ongoing confidence we have in the UK regional market’s capital and rental growth prospects, against the backdrop of the ongoing economic recovery and increasing capital investment outside the South East.”
Franck Steir Price acted on behalf of the vendor.
