There are four occupationally-leased units let This asset was seen as a safe, longer-term income play for investors
During purchase due diligence, we identified that one of the tenants was looking to offload its lease liability. Quick to action, we were able to secure a new tenant for the unit at an improved headline rent; the deal ended up completing within two weeks of the acquisition which gave us a strong start,
growing the rent from £4.40 per sq. ft. to over £5.00 per sq. ft.
The pandemic was an unexpected occurrence which we had to sensitively manage the tenants through. Fortunately, most of them are large well-established companies in the trade industry which were able to continue to operate, so we managed to get through that period with no casualties and only having to concede monthly payment plans. Thankfully, all tenants have come out the other side.
Having now owned the asset for four years, a number of lease events have occurred which are slowly but surely being worked through. With a lack of stock available in the Loughborough market and no new development, we are hopeful that tenants will remain on the estate.
Whilst we are seeing rental growth as expected, the local market has not moved on quite as much as anticipated. However in the background, yields have marginally improved from the original appraisal assumptions, so we expect investors to be ahead of initial return expectations.