New letting at St. John's Retail Park in Bedford

SCHRODER REAL ESTATE INVESTMENT TRUST LIMITED - New letting at St. John's Retail Park in Bedford

PR Newswire

London, August 11

12 August 2016

Schroder Real Estate Investment Trust Limited(the ‘Company’)

 NEW LETTING AT ST. JOHN’S RETAIL PARK IN BEDFORD

Schroder Real Estate Investment Trust Limited, the actively managed UK-focused REIT, announces further progress in executing its strategy of repositioning St. John’s Retail Park in Bedford, in order to attract higher quality retailers at increased rents. The Company acquired this asset in May 2015 for £31.8 million.

TJX UK Limited (‘TJX’), trading as Homesense, has exchanged an agreement to lease a 12,100 sq ft unit on a fifteen year lease at a rent of £250,000 per annum. The lease has a tenant only break option after 10 years and the tenant will receive a 12 month rent free period. The agreement is conditional on the receipt of planning permission for a trading mezzanine and external improvements.

The unit is currently let to DSG Limited (‘DSG’), trading as PC World, at £225,720 per annum on a lease that expires in September 2020.

DSG also occupies a separate 14,800 sq ft unit at the retail park, paying £265,500 per annum until September 2020 and has consolidated the PC World brand into this unit alongside its Dixons and Carphone Warehouse brands. Simultaneously with exchanging the TJX agreement the Company has:

· Entered into an agreement with DSG to vacate the 12,100 sq ft unit in return for paying the Company £400,000; and

· Entered into a separate agreement with DSG to modify their retained unit lease for a ten year term at £280,000 per annum with no rent free incentive. There is a tenant only break option at year five subject to a penalty of £250,000.

All agreements are conditional on planning which is expected in the final quarter of 2016. The combined agreements increase net income by 8%, with the £400,000 payment from DSG used to carry out the landlords works to TJX’s new unit. 

This latest asset management activity enhances the tenant mix, increases the potential to attract additional high quality retailers to the park and consolidates a higher rental tone which will be used as part of ongoing rent review negotiations. The TJX letting follows recently completed asset management activity that will on completion result in a yield on cost of over 7%.

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