UK Commercial Property Trust Ltd Acquisition
November 16 2017 - 2:01AM
RNS Non-Regulatory
TIDMUKCM
UK Commercial Property Trust Ltd
16 November 2017
16 November 2017
UK Commercial Property Trust Limited
UKCPT forward purchases Maldron Hotel in Newcastle City Centre
for GBP32 million
Disposal of office asset in Aberdeen above valuation
UK Commercial Property Trust Limited ("UKCPT" or the "Company")
(FTSE 250, LSE: UKCM), which is advised by Standard Life
Investments and owns a diversified portfolio of high quality
income-producing UK commercial property, announces that it has made
its first acquisition in the hotel sub-sector having contracted to
forward fund the development of a 265 bedroom four-star Maldron
Hotel in Newcastle city centre for GBP32 million, net of finance.
The development, which includes an ancillary retail unit, has been
pre-let on a long lease to the Dalata Hotel Group Plc ("Dalata")
and is expected to deliver a yield on cost of 5.4%. The deal is
structured through an initial upfront payment and interim funding
which attracts finance interest at 5% during the construction
period, followed by a balancing payment on completion.
Dalata, Ireland's largest hotel operator and an attractive
tenant covenant, has agreed a 35 year lease with five yearly,
annually compounded, RPI-linked upward only rent reviews with a cap
and collar of 0.5% to 3.5% and no break options.
The hotel, Dalata's ninth in the UK, will operate under its
flagship Maldron brand and is due to complete in the first quarter
of 2019, generating an initial passing rent of GBP1,590,000 per
annum. The total scheme, including the retail unit, is expected to
generate an initial passing rent of GBP1,740,000. As a result of
this acquisition, the proportion of RPI-linked and long-dated
income in UKCPT's portfolio will increase from 13.3% to 15.2% of
income. In addition to this, the portfolio's Weighted Average Lease
Length will extend to 8.7 years, up from 8.3 years.
The hotel, which will also include a conference centre, business
meeting rooms and restaurant space, is strategically positioned in
the heart of Newcastle city centre. It is located opposite the
popular Eldon Square shopping centre and five minutes' walk from
the central train station and forms part of a mixed use scheme
being developed by McAleer & Rushe.
UKCPT also announces that it has disposed of one of its smallest
assets, a 25,802 sq ft office in Aberdeen for GBP6.5 million,
representing a premium to book value.
Will Fulton, Fund Manager at Standard Life Investments, said:
"These transactions demonstrate our continued efforts to increase
the portfolio's exposure to high quality assets with the potential
for income and capital growth. As one strand of this strategy we
have been assessing opportunities in the alternative sectors as a
means to enhance longer-term income and dividend cover. Dalata and
its flagship Maldron brand are an exciting, well managed, high
quality, competitive hotelier with good Board level experience of
operating in the UK hotel market. Its business plan is strong and I
believe this hotel will compete well in the Newcastle market - home
to leading universities and a thriving business community - whilst
providing a high quality long and increasing income stream at an
attractive yield on cost."
ENDS
For further information please contact:
Richard Sunderland / Claire Turvey / Eve Kirmatzis, FTI
Consulting
Tel: 020 3727 1000
Email: ukcpt@fticonsulting.com
Notes to Editors
UK Commercial Property Trust
UK Commercial Property Trust aims to provide shareholders with
an attractive level of income together with the potential for
capital and income growth from investing in and managing a
diversified portfolio of high-quality, income producing UK
commercial property. The Company is advised by Standard Life
Investments and owns an over GBP1.3bn portfolio, which in 2016
produced GBP68.6 million of rental income, and is diversified by
location and sector across the UK, with a strong bias towards
prime, institutional quality properties. UKCPT listed on the Main
Market of the London Stock Exchange with a market cap of
approximately GBP1.2 billion and is a closed-ended Guernsey
registered investment company.
The Company was formed in September 2006, since when it has
consistently delivered above benchmark portfolio returns leading to
a NAV total return of 72.3% and share price total return of 75.7%,
both considerably in excess of the wider FTSE All-Share REIT index
which returned -11.8% over the same period.
Aberdeen Standard Investments is a leading global asset manager
dedicated to creating long-term value for our clients, and is a
brand of the investment businesses of Aberdeen Asset Management and
Standard Life Investments.
For further information on UK Commercial Property Trust, please
visit https://www.ukcpt.co.uk/.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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