Picton acquires the freehold acquisition of 109-117 High Street, Cheltenham for £5.3 million.
The mixed-use property comprises 7,700 sq. ft of ground floor retail space with 11,450 sq. ft of office space over two upper floors, and is located in Cheltenham’s pedestrianised town centre, adjacent to John Lewis.
Comprehensively refurbished in 2020, the property has strong net zero credentials including EPC ratings of B on the office and retail elements. It is leased to four occupiers including Tesco, Just Go Holidays and Barnardo’s with an average lease length of 12 years to expiry and eight years to break.
The current annual rental income is £0.4 million, equating to £21 per sq. ft, with the majority of leases containing fixed rental uplifts that will increase income to £0.5 million per annum by 2026.
The purchase price reflects a net initial yield of 7.2%, rising to 9.0 % by 2026. The low capital value of £277 per sq ft is below its estimated replacement cost.
The acquisition was funded through the use of its revolving credit facilities.
"This is our second, mixed use acquisition this year. It is a quality, future proofed building, that has recently been leased and after significant expenditure. The income profile and fixed rental uplifts will further improve our earnings."
Michael Morris Chief Executive