Savills Investment Management’s UK Income Growth Fund has acquired a mixed-use building in Lytham St Annes from RO Real Estate for £6.7m. The deal reflects a net initial yield of 5.67%.
The property is prominently located within the affluent coastal town and provides 12,345 sq ft (1,147 sq m) of retail accommodation plus a 61-bedroom hotel, which is split across four storeys.
The building is fully let to tenants including Travelodge, M&S Simply Food and Costa Coffee producing an annual rent of £405,146, with a long average weighted unexpired lease term of 15 years.
Freddie Guest, associate in the investment team at Savills, commented, “We are very pleased to have secured the acquisition of this excellent mixed-use building in Lytham St Annes on behalf of our client.
'The opportunity was very attractive due to the long dated income offered, 90% of which is secured against national covenants and 58% of which benefits from guaranteed RPI linked rental increases.”
RO Real Estate was represented by Ben Urquhart and Luke Wilson of CBRE. They commented, “We received an excellent level of interest in this asset and were delighted to conclude a sale for our client RO after a competitive bidding process.
'The sale demonstrates the attractiveness of mixed-use, long income assets and we expect strong investor demand to continue for similar type of opportunities.”