TIDMSREI 
 
14 September 2015 
 
                 Schroder Real Estate Investment Trust Limited 
 
                                (the 'Company') 
 
                  PRE-LET TO PREMIER INN AT THE ARNDALE CENTRE 
 
In January 2014 Schroder Real Estate Investment Trust Limited (the 'Company') 
acquired the Arndale Centre in Leeds for GBP16.16 million, reflecting a net 
initial yield of 9.18% per annum.  The acquisition strategy was to generate 
income growth from asset management and explore change of use.  Progress 
executing this strategy resulted in the property being valued at GBP19.75 million 
as at 30 June 2015. 
 
The Company now announces that it has exchanged a conditional Agreement for 
Lease with Premier Inn Hotels Limited ('Premier Inn') for a pre-letting of a 
new 96 bedroom hotel within Arndale House.  Arndale House is a substantially 
vacant office building comprising 32,000 sq ft over seven floors, which on 
acquisition produced a net rental income of GBP45,000 per annum.  Arndale House 
forms part of the Arndale Centre, a multi-let retail, leisure and office 
property totalling 125,834 sq ft that is located in Headingley, a densely 
populated suburb 2.5 miles from Leeds city centre. 
 
The Agreement for Lease is conditional on the Company securing planning consent 
and converting Arndale House to hotel use, including the addition of a new 
floor, at a cost of approximately GBP6.7 million.  Subject to these conditions 
being satisfied, Premier Inn will enter into a new 30 year lease, with a tenant 
only break option after 20 years, at a rent of GBP412,800 per annum with an 
initial six month rent free period.  The lease will benefit from five yearly 
upwards only rent reviews linked to the Consumer Price Index ('CPI'), subject 
to a cap of 4% per annum compound.  The lease will be guaranteed by Premier 
Inn's parent company, Whitbread Group PLC.  The target date for completion of 
the lease is November 2016, and the construction cost may change dependent upon 
on-going negotiations with the proposed contractor. 
 
Assuming the lease completes as planned, Premier Inn will become the largest 
tenant at the Arndale Centre, increasing the average unexpired lease term at 
the property, assuming tenants break at the earliest opportunity, from 4.2 to 
approximately eight years.  The letting will also increase the portfolio's 
defensive qualities, with Arndale House representing approximately 1.4% of the 
portfolio void rate that totalled 9.2% as at 30 June 2015. 
 
Nick Montgomery, Head of UK Investment at Schroder Real Estate Investment 
Management Limited, commented: 
 
"The conditional letting to Premier Inn is attractive as the income return 
should exceed the return on comparable investments available in the market as 
well as enhance value." 
 
For further information: 
 
Schroder Real Estate Investment Management Limited:       020 7658 6000 
Duncan Owen / Nick Montgomery 
 
Northern Trust:                                           01481 745529 
David Sauvarin 
 
FTI Consulting:                                           020 3727 1000 
Dido Laurimore / Ellie Sweeney 
 
 
 
END

(END) Dow Jones Newswires

September 14, 2015 02:00 ET (06:00 GMT)

Invista (LSE:IFD)
Historical Stock Chart
Von Mai 2024 bis Jun 2024 Click Here for more Invista Charts.
Invista (LSE:IFD)
Historical Stock Chart
Von Jun 2023 bis Jun 2024 Click Here for more Invista Charts.