Regent Circus development is bought for £40m
5:30am Thursday 21st August 2014 in By Beren Cross, @BerenCross
REGENT Circus has been bought for more than £40m by the same investment company which owns The Parade shopping centre.
UK Commercial Property Trust Limited (UKCPT), a Guernsey investment company launched in September 2006, has exchanged contracts to acquire Regent Circus for £40.48m.
Last week, the Adver reported on the £32.8m price tag which had been slapped on the leisure and retail asset by Ashfield Land, the developer.
Now a deal has been reached for a project which UKCPT has said was made attractive by the fact it was already 94 per cent pre-let, with a Morrisons supermarket and Cineworld cinema anchoring it.
The company has also stated the Morrisons supermarket will open in November, with the leisure element expected to open in early 2015.
On completion, the scheme will generate £2.1m per annum in rental income from leases with an average length of 20 years to occupiers such as Prezzo, Ask and Nando’s.
The cinema lease also incorporates fixed rental increases.
UKCPT said: “Regent Circus is the first new retail and leisure scheme to be built in Swindon in a number of years and will provide a modern, prominent and central scheme which will benefit from the town’s strong communication and transport links, as well as a wide and affluent catchment area.
“The purchase will be financed in part by the £32m in proceeds from the company’s treasury share issue in May with the remainder financed from existing resources.
“The consideration will be satisfied through a number of staged payments, with £21.25m payable around practical completion of the development in early November and the balance paid in tranches as the restaurant elements are completed.”
Christopher Hill, chairman of UKCPT, said: “This acquisition supports the company’s ongoing investment strategy of acquiring assets that have the potential for both income and capital growth.
“It also represents an increase in the company’s leisure holdings, one of the company's favoured sectors, and is let to tenants with strong covenants and on terms that will also improve the average lease length of the portfolio.
“The board is pleased the investment manager has deployed all the proceeds of the treasury share issues in Mayso soon for this acquisition.
“The investment manager is actively looking at further opportunities in the market where the company can deploy capital at attractive price levels.”