Regional REIT has sold an office property, Arena Point, in Leeds for £10.65m, representing a substantial uplift of 15.8% against the 31 December 2020 valuation.
Regional REIT said the purchaser intends to demolish the 19-storey office block (76,176 sq. ft.) to make way for a 43-storey tower, providing accommodation for 705 students.
The £10.65m disposal represents the final part of the long term business plan for this asset, which the company acquired with the adjacent two-storey casino and pub, known as the Podium Buildings, in March 2016 for £10.5m. In July 2018, the Podium Buildings were sold to Unite Students for £12.2m for development into what is now the 16 and 27-storey towers at White Rose View.
The final disposal of Arena Point has now secured profits after all costs for the site of some £9.3m, producing a geared internal rate of return of 24.6%.
Stephen Inglis, CEO of London & Scottish Property Investment Management, the Asset Manager of Regional REIT commented:
“The disposal of Arena Point at nearly 16% above the 2020 year end valuation concludes the successful long term business plan for the site; having generated profits after all costs for the site in excess of £9.3m. The successful final execution of this ambitious site plan is testament to the capabilities of the asset management team to add considerable value.
We have a strong and growing pipeline of attractive new acquisition opportunities and intend to reinvest the proceeds of this sale into other mispriced office assets offering similar high returns in terms of yield and capital growth.”