NR WATFORD, South Oxhey Central (phase 1 & 2)

Following substantial completion of Countryside Property and Home Group’s mixed-use (residential and retail) town centre regeneration scheme, focused on the transport hub at Carpenters Park Station, we sold the created 2 long leasehold retail investment packages. This followed our letting of all the retail units (20+) in phase 1 and 2, on 10 year+ leases (with 5 yearly RPI rental uplifts) at rents in excess of £20 psf, to a mix of several nationals but mainly independent retailers.

The created investments were sold in two tranches, achieving prices reflecting net initial yields of 6.85% and 7.25% respectively, and generated in excess of £7.2m. The second sale took place during the COVID-19 pandemic period with limited impact on the price and resultant yield.

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We introduced this ‘off market’ unique and exceptionally well located (on an A12 junction and opposite the 140,000 ft.² gross Sainsbury’s superstore) to a local authority investor client. Based on indexed linked and fixed rental uplift institutional prelets to B&Q and Aldi, which combined will generate c£1.7m pa.exc, the client entered into a hybrid forward purchase agreement at a gross price of c£30.4m reflecting an overall NIY of 5.56%, with the scheme due for completion in late Summer 2021.

Provision has been made to buy the balance of the scheme once let. Working closely with the client’s solicitors, and the vendor, we found solutions to overcome the inevitable challenges presented by the uncertainties created by COVID-19.

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Following our introduction of this opportunity, our client, Uttlesford District Council undertook the purchase and leaseback of Weston Homes state of the art ‘most luxurious house builder HQ in Britain’ comprising a c48,000sqft HQ office building and parking, for £17m + top ups. This was on the basis of a 25 year new institutional leaseback with 5 yearly fixed uplifts (13.14%, based on 2.5% pa compounded) with a commencing rent of £ and reflected a NIY of just over 6%.

This ‘in area’ purchase was secured ‘off market’ in the uncertain early COVID-19 Pandemic period and reflected the Council’s desire to invest in a well performing resilient house builder based and active ‘in patch’.

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