Schroder Real Estate Investment Trust (REIT) is to sell its site at Coventry Road, Hinckley for GBP4.525 million, on a subject to planning basis, to Redrow Homes Limited.
The price compares with an independent valuation as at 30 June 2014 of GBP3.85 million.
The property comprises a 9.1 acre former industrial site close to Hinckley town centre and is currently vacant and non-income producing. The disposal of this asset is consistent with the company’s strategy to maximise value from low or non-income producing property.
In August 2013 the company secured an outline planning consent for 122 residential units. Under the terms of the transaction, Redrow is obliged to make a detailed residential planning application within three months of exchange of contracts at its own cost. This application must be consistent with the outline consent already secured by the company.
Subject to Redrow securing detailed planning consent and satisfaction of other ancillary conditions, the company will receive 50 per cent of the purchase price at completion with the balance nine months later. The deferred consideration is secured by a charge over the land and Schroder REIT also has potential to receive additional consideration under an overage agreement which is linked to the residential sales values achieved by Redrow in due course.