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AEW UK REIT PLC on Monday said it completed the sale of two industrial assets in Bradford and Leeds for a combined £16.1 million. The London-based real estate investment trust, which focuses on UK regional commercial property, said the sale of Euroway Trading Estate in Bradford and Lockwood Court in Leeds reflected a blended net initial yield of 6.2% and a weighted average premium to acquisition price of 31%. Individually, Euroway was sold £6.5 million, reflecting a 6.8% NIY, while Lockwood was sold for £9.7 million, reflecting a 5.9% NIY. AEW UK said both sales realise significant profit for shareholders. It said Euroway and Lockwood’s sale prices exceeded their most recent valuation prior to going under offer by 17% and 9.7%, as well as their acquisition prices by 30.3% and 31.8%. Reinvestment of the sales proceeds into comparatively higher yielding pipeline assets will be accretive to AEW UK’s earnings, the company said. Euroway was acquired in November 2016 for £5.0 million, reflecting an 8.1% NIY, AEW UK said, while Lockwood Court was acquired in February 2019 for £7.3 million, reflecting a 7.7% NIY. AEW UK said the Euroway property benefitted from a new eight-year term certain to Advanced Supply Chain (BFD) Ltd upon acquisition, while in December 2019, the company completed a rent review which resulted in a 9.1% annual rental uplift. It added Lockwood Court was acquired with the benefit of a new 10-year lease to LWS (Yorkshire) Ltd, guaranteed by Harrogate Spring Water Ltd. In December 2019, AEW UK then secured a new 10-year lease to Harrogate Spring Water, following LWS entering into liquidation. ‘Both Euroway Trading Estate and Lockwood Court have performed well, delivering strong returns to shareholders since acquisition,’ said Portfolio Manager Laura Elkin. ‘The value creation through strong performance of the Yorkshire industrial markets, coupled with our successful asset management initiatives, presented an opportunity to crystallise capital growth and reinvest the sales proceeds into higher yielding opportunities. As such, we expect to make further purchase announcements in the coming months.’ Shares in AEW UK were up 3.0% to 95.90 pence each in London on Monday morning. Copyright 2023 Alliance News Ltd. All Rights Reserved.
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