French SCPI fund Iroko Zen has acquired a leisure and retail property on Newcastle Quayside from United Property Services for £14.5m, in an off-market deal.
The leisure and retail property, which spans 9-15 Lombard Street, 9 Quayside, 16 Queen Street and 6-10 King Street, was built in around 1860 and is let to Premier Inn Hotels, Stonegate Pub Company and Spirit Group Retail.
The freehold sale represents a net initial yield of 7.42% and the total rent is £1,152,478 per annum. The income is well-secured, with 75% of the rent accounted for by Premier Inn, and the hotel rent is reviewed five-yearly linked to CPI (1% and 4%).
Dickon Wood, partner at Knight Frank in Newcastle, which acted for Iroko Zen, said: “This acquisition highlights continued foreign investor appetite for UK real estate in the regional cities. It reflects a growing trend among investors to diversify away from saturated urban centres and seek higher returns.”
Robert Irving Burns represented United Property Services on the transaction.
