RDI REIT continued to reduce its exposure to the retail sector this week, offloading its UK retail parks portfolio to M7 Real Estate Limited for £156.9 million.
The sale is the latest in a series of retail asset sales by RDI and comes just one week after the REIT sold its Schloss-Strassen Center in Berlin to Benson Elliot Capital Management for €65.5 million.
The portfolio of assets sold include six retail parks in total, with three in England, one in Wales and two in Scotland. As of 29 February 2020, the portfolio had gross annualised rental income of £12.5 million, a WAULT of 7.3 years and occupancy of 98.4 per cent.
The purchase price reflects a 3% discount to the last reported, 29 February 2020, values and a topped-up net initial yield of 7.5 per cent.
The portfolio formed part of the RDI’s £275.0 million AUK financing facility which includes a £137.5 million revolving credit facility. The sale proceeds will be used to reduce the revolving credit facility by approximately £100 million.
The remaining £56.9 million will be held as cash, increasing the cash and facility headroom of the group to around £240.0 million.
Mike Watters, CEO at RDI, commented, “Together with the disposal of Schloss Strassen Center in Berlin just last week, we have taken a substantial step forward in the implementation of our portfolio strategy in a very short space of time and against a challenging backdrop. In just 18 months since announcing our strategic review, we have undertaken around £330 million of disposals and our teams working on these transactions deserve to be commended for markedly reducing our exposure to the retail sector. “
M7 Real Estate asset manages over 835 assets in the retail, office and industrial sectors on behalf of its investors across Europe with a value of circa €5.1 billion.
The transaction is expected to be completed in mid-October 2020.