The sale didn’t benefit from full scale ‘open’ marketing, which presented an immediate opportunity for us.
All of the units are fully-let to wellknown trade/retail sector occupiers (six companies in total). The units in Sittingbourne are let to Domino’s Pizza, Johnstone’s Decorating Centre, Topps Tiles and Sally Salon Services.
Despite the lower initial yield and higher capital value than we would have traditionally bought into, the units were well-positioned to capture strong income growth given their quasi retail and ‘M25’ locations. This has already been evidenced with the agreement of a new lease with Screwfix on the Mitcham asset where the rent has increased from £91,000 to £168,000 per annum.
In respect of both Mitcham and Canterbury, our mindset was that even if the tenants vacated, we had
the belief that these assets would be very well-received in the occupational market. The longer-term plan on these assets is that once ‘stabilised’ and rental growth is captured, we will explore a
sale on an individual basis. For Sittingbourne, there will be more of a longer-term income play waiting for rent reviews in 2024.