Crewe shopping centre changes hands

Birmingham-based listed property fund Real Estate Investors has paid Scottish Widows £20m to acquire the freehold of the 150,000 sq ft Market Shopping Centre in Crewe. The price represents a net initial yield of 9.00%.

The property produces £2.165m rental income a year gross, with an average unexpired lease length of 5.14 years and 4.35 years to break.

The shopping centre incorporates 25 retail units with ground floor retail accommodation and first floor ancillary. In total, there is 154,130 sq ft of accommodation, with 294 external car parking spaces. Contracted tenants include River Island, Halifax, Superdrug, Brighthouse, Ernest Jones, Hutchinson 3G, Argos, Iceland, B&M, Peacocks and Poundworld. The retail space has 100% occupancy.

REI, incorporated as a real estate investment trust, allowing for more tax efficient returns, has spent £35m this year on acquisitions. The latest deal takes the company’s current contracted rental income to £15.7m.

Paul Bassi, chief executive of REI, commented: “We have continued to acquire criteria compliant assets during the period of uncertainty created by the European vote. This latest acquisition offers good opportunities to enhance performance through strategic asset management and takes our contracted rental income to £15.7m, up 31.8% since the 2015 year-end. Additionally, we have a number of ongoing sales and acquisitions that are in our legal pipeline, or in advanced discussions, with numerous new lettings and lease renewals from within the existing portfolio, which will enhance rental income and our average lease lengths.”