Savills has acquired a mixed-use building in Lytham St Annes from South East property company RO Real Estate for £6.7m in a deal reflecting a net initial yield of 5.67%.
The building, purchased on behalf of Savills Investment Management’s UK Income Growth Fund, is fully occupied, with a 61-bedroom Travelodge over four storeys joined by 12,345 sq ft of retail space let to tenants including M&S Foodhall and Costa.
Producing an annual rent of £405,146, with a long average-weighted unexpired lease term of 15 years, the building occupies a prominent site off Clifton Drive South.
Freddie Guest, associate in the investment team at Savills, said: “We are very pleased to have secured the acquisition of this excellent mixed-use building in Lytham St Annes on behalf of our client.
“The opportunity was very attractive due to the long dated income offered, 90% of which is secured against national covenants and 58% of which benefits from guaranteed RPI-linked rental increases.”
RO Real Estate was represented by CBRE. The transaction was completed after a competitive bidding process.