AEW UK REIT plc (AEWU) completes on the sale of an office building at 225 Bath Street, Glasgow to IQ Student Accommodation for £9.3m. The sale agreement required AEWU to negotiate with tenants to bring the asset to vacancy. The sale realises a long-term change of use strategy for the asset with contracts for the sale having been exchanged with a subsidiary company of IQ Student Accommodation in October 2020.
IQ Student Accommodation has received planning permission for the demolition of the property and the development of a 527-unit purpose-built student accommodation (PBSA) scheme.
Following the sale pf the property, the occupancy rate for AEWU’s remaining portfolio will increase to 91.60% from 86.97% as at 30 June 2022. Reinvestment of the sale proceeds into pipeline assets under exclusivity is expected to provide a significant boost to the company’s earnings due to both higher levels of anticipated income receipts and lower running costs.
“As the culmination of a long running business plan, we are delighted to see this sale complete. The disposal not only maximises the value of the asset but will increase occupancy levels across the remaining portfolio, reduce running costs and boost earnings, once capital is reinvested. The proceeds from the sale are already under offer to assets in exclusivity and, as such, we expect to make further purchase announcements in the coming weeks.” Laura Elkin, Portfolio Manager, AEW UK REIT plcLaura Elkin, Portfolio Manager, AEW UK REIT plc