Fri, 26 Nov 2021 | COMMERCIAL PROPERTY
Ediston Property Investment Company (EPIC) has announced the sale of an office building in Bath, Somerset in a deal worth £5.925 million. The net initial yield on the disposal is 5.7 per cent, in line with a valuation of the property made on September 30 2021.
The office building is Midland Bridge House, located on Bath’s Midland Bridge Road, which was initially acquired by EPIC for £4.39 million in June 2015. The property extends to approximately 18,500 sq ft of refurbished office space, set over a ground floor and three upper floors. The space is let to solicitors Royds Withy King until March 2029.
The sale represents the first disposal in EPIC’s new strategy, announced in Q3 2021, through which it is looking to offset its office-based assets and reinvest in retail warehouse assets. The company views retail warehouses as more in line with its asset management style, as well as more suited to the changes that COVID-19 has led to in retail.
Commenting on the acquisition, EPIC Investment Manager Calum Bruce said: This is the first office sale since we announced our new strategy in Q3. Progress is being made with our other office sales and we are actively looking at reinvestment opportunities. We want to acquire retail warehouse assets which are more suited to our intensive style of asset management.”
In June 2021, EPIC wrote that, since the pandemic hit “retailers have to consider not only how best to run balance their online and offline businesses, but also the costs of storage, distribution and returns. For shoppers and shop-owners alike, out-of-town retail parks provide a solution.”
“These retail parks offer retailers a wealth of attractions for owners and tenants alike. Their lease lengths tend to be good, and the flexibility of their units allows for easy upsizing and downsizing as business conditions changes. As a result, vacancy rates tend to be low.”
EPIC believes that retail parks could be set to benefit from the shift to e-commerce during the pandemic, writing that "they are perfectly placed to provide the joined-up, omnichannel experience that customers want.”
In August, the company made one of its first acquisitions under the new strategy, buying Springkerse Retail Park in Stirling for £21.85 million. Commenting at the time, Calum Bruce said: “The purchase of this asset is consistent with our recently updated investment strategy of acquiring retail warehouse parks. It is our objective to recycle capital from lower yielding assets into properties which are more suited to our intensive style of asset management, and this acquisition achieves this aim.”
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