TIDMUKCM
UK Commercial Property REIT Ltd
12 May 2022
UK Commercial Property REIT Limited
UKCM acquires Leeds hotel and long stay development opportunity
for a total commitment of GBP62.7 million
12 May 2022: UK Commercial Property REIT Limited ("UKCM" or the
"Company") (FTSE 250, LSE: UKCM), announces that it has acquired a
hotel development opportunity in Leeds, from Marrico (Sovereign
Square) Ltd, a joint venture between Marrico LLP and Helios. The
site itself was owned by Leeds City Council and UKCM is to fund the
development, which is to be completed by Marrico, for a total
commitment of GBP62.7 million. The acquisition is in line with
UKCM's strategy to invest in operational real estate sectors that
are expected to deliver resilient rental incomes.
The 12-storey hotel will be among the very best in Leeds, a city
with excellent central amenities but an under-supply of quality
hotels. It is scheduled to complete in 2024 and will have a 25-year
franchise agreement in place with Hyatt Hotels, one of the leading
global hotel brands with aspirations to grow its presence within
the UK. The hotel will be operated under a lease by Interstate
Hotels & Resorts, a leading international hotel operator, with
UKCM's rental income based on the income generated from the
operation of the hotel.
The 140,000 sq ft property will comprise 305 rooms, split
between the short stay Hyatt Place and the long stay Hyatt House
brands. The upscale hotel will provide meeting rooms, a gym and
several food and beverage options, including a rooftop bar with its
own dedicated entrance.
The development is targeting a BREEAM Excellent rating and will
have a positive impact on the local community with the creation of
a number of new jobs. UKCM will work closely with both Hyatt and
Interstate to ensure the hotel is run in line with all parties'
strong ESG policies and commitments to minimising energy
consumption and wastage.
The hotel is located on Sovereign Square in central Leeds, in a
prime position adjacent to the city's main railway station and in
close proximity to a number of high-quality office developments
with long term corporate occupiers. Leeds is one of the UK's
fastest growing cities and is the main driver of a regional economy
that is forecast to grow by 21% over the next ten years, with
financial and business services set to generate over half of GVA
growth over that period.
Will Fulton and Kerri Hunter, Fund Managers at UKCM, commented:
"This is the latest acquisition in line with the Company's strategy
to enhance earnings by selective investment in assets where the
rents are derived solely from their operational performance. By
investing in this way in compelling locations with strong market
dynamics and teaming up with strong, reputable tenants we are able
to obtain a yield that is at a significant premium to that which
would be derived from a traditional leasing model
"Not only will this hotel benefit from a significant
supply-demand imbalance of quality accommodation in Leeds and be
operated by one of the world's leading international hotel firms,
it is also designed to be future fit with strong ESG credentials
and a flexible split between short and long stay brands, as well as
external food and beverage options to vary the asset's offering and
maximise its income potential ."
UKCM is managed and advised by abrdn* and owns a diversified
portfolio of high-quality income-producing UK commercial
property.
AREA acted for UKCM who were further advised by Whitebridge
Hospitality. Addleshaw Goddard provided legal representation for
UKCM.
DLA Architecture, Leeds is the architect for the scheme, Square
One Law acted as advisers and legal representative and BNP Paribas
as agent for Marrico and Helios.
Interstate Hotels & Resorts was represented by Shepperd and
Wedderburn
ENDS
For further information please contact:
Richard Sunderland / Claire Turvey / Emily Smart / Andrew Davis,
FTI Consulting
Tel: 020 3727 1000
Email: UKCM@fticonsulting.com
Notes to Editors - UK Commercial Property REIT
UK Commercial Property REIT is a FTSE 250 Real Estate Investment
Trust listed on the London Stock Exchange. It 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 GBP1.67 billion (as at 31 March 2022) diversified
portfolio. The portfolio has a strong bias towards prime,
institutional quality properties and is diversified by location and
sector across the UK.
*The Company is managed and advised by abrdn (the Company's
appointed AIFM).
Further information on the Company's investment policies, the
types of assets in which the Company may invest, the markets in
which it invests, borrowing limits as well as details of its
management, administration and depositary arrangements can be found
in the Company's Annual Report and Investor Disclosure Document.
The above documents are available on the Company's website
www.UKCPREIT.com. Paper copies of these documents are available on
request, free of charge, via the contact details outlined on the
website.
Property is a relatively illiquid asset class, the valuation of
which is a matter of opinion. There is no recognised market for
property and there can be delays in realising the value of property
assets. Investors should be aware that past performance is not a
guide to future results. The value of investments, and the income
from them, can go down as well as up, and an investor may get back
less than the amount invested.
For further information on UK Commercial Property REIT, please
visit www.UKCPREIT.com .
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