The AEW UK Real Return Fund has announced the purchase of two car showrooms and an industrial warehouse unit for £10.67m. The car showrooms are located in Blackburn and Liverpool and were purchased for £3.92m and £2.2m respectively, reflecting net initial yields of 6.51% and 6.26%. The industrial unit, situated in Ford, West Sussex, was purchased for £4.55m, which equates to a 7.4% net initial yield.
The 25,251 sq ft car showroom in Blackburn is located in Trident Park, the town’s prime motor retail location to the north of the town centre. It currently houses an Audi dealership and is surrounded by other motor dealers such as Ford, Mercedes, Toyota, BMW and Mini. The current tenant has 6.6 years left on its lease.
The second showroom in Liverpool is currently operating as a Fiat dealership and measures 9,045 sq ft. It is situated one mile south of the city centre on Sefton Street, a well-established commercial and car showroom location. Other dealerships nearby include Jaguar Land Rover, Kia, Renault, Nissan and Mazda. The asset was purchased freehold and has an unexpired lease term of 11.25 years with 5 yearly reviews linked to RPI.
The warehouse unit has a total floor area of 83,124 sq ft and is located on Rudford Industrial Estate, the main industrial area in Ford. It has strong transport connections to the A27 at Arundel and is home to 43 occupiers, including Viridor Support Services, R T Page & Sons, Favour Fairy, Demon Designs, South Coast Skips, Transvac Systems and Storm Creative. The current tenant is Jablite Limited, and the lease benefits from an RPI linked rent review in April 2020.
Knight Frank acted for AEW for the three acquisitions.
Ian Mason, Portfolio Manager at AEW UK Real Return Fund, commented: “We are very pleased to have completed these latest acquisitions. The properties complement our portfolio, which has a diversified income stream from over 40 properties in a variety of sectors. The Fund remains positioned as an alternative to traditional core and long income funds with a focus on diversification, cash flow and inflation protection. We continue to assess both traditional and alternative sectors of the property market and have a strong pipeline of opportunities.”
