Sarah Godfrey
15 June 2017 · 1 min read

UK Commercial Property Trust acquires Sheffield office for £20m

Second purchase so far in FY17 at 5% yield

UK Commercial Property Trust (UKCM), a £1.2bn property investment company managed by Standard Life Investments, has acquired a 61,638 sq ft office building at Cutler’s Gate, Sheffield, from Ediston Property Investment Company (EPIC).

UKCM paid £20.2m for the building, which is let to Capita Business Services, reflecting a net initial yield of 5%. EPIC had purchased the offices in 2014 and had undertaken asset management initiatives including extending the lease term from 11 to 25 years. The building has 22 years to lease expiry and currently generates rent of £1.08m per annum, with annual index-linked rent increases.

Fund manager Will Fulton said that the acquisition meets UKCM’s current preference for long-term, secure and growing rents, while at the same time further enhancing the company’s dividend cover.

In its annual results for the year to 31 December 2016, published on 20 April 2017, UKCM reported that it had £75m of uncommitted cash that was available to invest during FY17, as well as access to a £50m revolving credit facility. The purchase of the Sheffield office building, together with another acquisition in February of a distribution warehouse in Burton upon Trent for £22.2m, means that UKCM has so far invested £42.4m in new properties this year, with a blended initial yield of 5.4%.

Read our initiation note on UKCM here.

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