Tue, 04/03/2014 - 14:28
Legal & General Property (LGP), on behalf of its Leisure Fund, has purchased Middlesbrough Leisure Park in Middlesbrough from Highpoint Estates for GBP21.25m, reflecting a net initial yield of 6.9 per cent.
Providing the only dedicated leisure offer within Middlesbrough town centre, the park comprises an 11-screen Cineworld cinema, a two level gym complex, four restaurants and a retail unit, arranged over 109,856 sq ft of floor space.
Occupying a prime position on the edge of Middlesbrough town centre and fronting the A66, the park also offers extensive car parking, with a total of 715 spaces.
Current tenants include DW Sports, Nandos, McDonalds, Pizza Hut, American Golf and Subway. Generating an annual rental income of GBP1.54m, the property has an average weighted unexpired lease term of over 12 years.
Andrew Ferguson, head of leisure at Legal & General Property, says: “In line with the fund’s investment strategy, the acquisition of this well located, multi-let leisure park demonstrates strong property fundamentals, backed by consistently solid tenant trading performance. Furthermore, it offers an attractive income return and the potential to drive rental growth through longer term asset management initiatives.”
Formed in 2002, the Leisure Fund is held through a Jersey Property Unit Trust and, following this latest acquisition, has approximately GBP350m of assets under management, comprising 10 prime leisure assets, occupying dominant positions across the UK.
Over the 12 months to December 2013, the fund delivered a strong performance of 10.9 per cent to its institutional investors, which compares favourably to the IPD Specialist Funds index which generated 8.5 per cent. Furthermore, it is the third best performing fund in the IPD Pooled Property Funds Index over the past 10 years and with a total average performance of 8.5 per cent per annum.
Savills advised Legal & General Property on the transaction and Highpoint Estates represented itself.
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