AEW sells £26m chunk of Coventry retail park
AEW has completed a partial sale of Central Six Retail Park in Coventry to a private investor for £26.25m.
The group has offloaded Units 1-11, with the sale price reflecting a net initial yield of 7.49% and a capital value of £213 per square foot.
AEW said the sale represents a 60% premium to the purchase price of the entire property, which it acquired in November 2021 for £16.41m.
Excluding the remaining units (Units 12, A(1), A(2), and B) which AEW will retain, the sale is expected to generate an internal rate of return in excess of 16%.
The sale price will be paid in two tranches; the first instalment of £25,900,000 was paid on 13th December 2024, whilst the second instalment, amounting to £350,000, will be paid on the completion of a new lease of Unit 10 to Superdrug.
The purchaser is also contracted to pay a third instalment of £500,000 to AEW, should it complete a letting to an electric vehicle charging operator within the first 18 months of ownership.
Central Six Retail Park is now fully let following the completion of three new lettings to Aldi, Iceland, and Whitecross Dental Care, which added £668,000 of annual rental income. These three lettings were completed alongside lease renewals and regears to Next, Boots, and TK Maxx.
Henry Butt of AEW UK, 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.”