KCR Residential REIT PLC £8.4 million of acquisitions from Inland Homes (1641T)
July 02 2018 - 2:00AM
UK Regulatory
TIDMKCR TIDMINL
RNS Number : 1641T
KCR Residential REIT PLC
02 July 2018
2 July 2018
KCR Residential REIT Plc
("KCR" or "the Company")
GBP8.4 million of acquisitions from Inland Homes under strategic
relationship agreement
-New build apartment block in Southampton and Inland Commercial
Ltd-
Further to the announcement on 21 June 2018, KCR Residential
REIT Plc ("KCR") is pleased to announce that it has completed the
agreement for lease of Block B, Chapel Riverside ("Block B"), a new
build apartment block in Southampton, and has acquired the entire
share capital of Inland Commercial Ltd, a special purpose vehicle
("SPV"), from Inland Homes Plc ("Inland"), the leading brownfield
regeneration specialist and housebuilder with a focus on the South
and South-East of England.
The transactions are the first agreed between the two companies
following the May announcement of the establishment of a strategic
relationship to support the delivery of high quality,
low-to-mid-priced housing for rent. The agreement gives KCR right
of first refusal over an initial identified pipeline of Inland
assets, in return for Inland receiving a combination of cash and
equity in KCR.
Block B is a new-build apartment block consisting of 27
two-bedroom apartments and 28 dedicated car parking spaces. It
forms part of Inland's major Chapel Riverside redevelopment project
in Southampton, Hampshire, being undertaken in partnership with
Southampton City Council. It is located on the waterfront in a
prominent location on the west bank of the River Itchen, within
walking distance of Ocean Village and the city centre. Block B is
being developed by Inland's construction arm, Inland Partnerships,
and is scheduled for completion and hand over to KCR in August
2018.
On completion, KCR will be granted a 999-year long-leasehold
interest at a peppercorn rent for a total consideration of GBP5.82
million. KCR estimates the rental value of Block B at GBP276,000
per annum, generating a projected gross annual yield on
consideration of 4.74%. The consideration is payable in tranches
with the final payment due in October 2018.
Inland Commercial Ltd owns two new-build supermarket properties,
one freehold and one long leasehold, that support major residential
developments in the South East. The supermarkets are let on 15-year
leases to Co-op (from August 2016) and Sainsburys (from April 2017)
and are located in Leighton Buzzard and West Drayton respectively.
The rents are index linked to the RPI and the leases are on
effective full repairing and insuring terms.
The total consideration of GBP2.56 million includes GBP1.32m of
Metro Bank debt already within the SPV. The portfolio generates an
annual income of GBP133,750 and delivers an annual yield on
consideration of 5.2%. The consideration for the equity of the SPV
will be settled in shares and or cash in such combination to be
determined by 31 July 2018.
Dominic White, the chief executive of KCR, commented:
"We are extremely pleased to announce the completion of our
first two transactions under the terms of our strategic
relationship with Inland Homes.
"The Chapel Riverside acquisition is a significant residential
development that is in line with KCR's acquisition strategy.
Inland's Chapel Riverside development is an impressive new landmark
in a prime location in a city with strong growth ambitions,
excellent transport links and access to high quality leisure and
retail facilities.
"The supermarket properties support two large modern residential
developments in the South East. As well as being let long term to
high quality tenants, the investments generate a strong and growing
5.2% yield that is linked to inflation."
Stephen Wicks, chief executive of Inland Homes, added:
"We continue to realise shareholder value from portfolio
disposals, the proceeds of which will be reinvested across our
exciting programme of both regeneration and residential development
activity. At the same time, having formed the strategic
relationship with KCR in May, we are pleased to be delivering on
the stated strategy so soon after and alongside this fast growing
and ambitious business."
-Ends-
Contacts:
KCR Residential REIT plc info@kcrreit.com
Dominic White, Chief executive +44 20 3793 5236
Arden Partners plc
Steve Douglas +44 20 7614 5917
Yellow Jersey PR
Charles Goodwin +44 7747 788 221
Abena Affum +44 7555 159 808
Notes to Editors:
KCR's objective is to build a substantial UK low-to-mid-priced
residential property portfolio that generates both secure income
flow and increasing net asset value for shareholders. KCR acquires
blocks of studio, one-and two-bed apartments that are close to
transport links, shopping and leisure.
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END
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