AEW UK REIT acquires mixed-use asset in Bath for £11.5m

AEW UK REIT plc (LSE: AEWU) has announced the acquisition of a freehold, mixed-use asset in Bath city centre for £11,500,000, achieving a net initial yield of 8.0% and a capital value of £223 per square foot. The deal leaves the Company with approximately £3 million in remaining investable cash, edging closer to full deployment.

The acquired property is situated on a rare freehold island site of approximately 0.4 acres, adjacent to the South Gate Shopping Centre, a major retail hub in Bath. The site is less than a five-minute walk from Bath Spa Train Station and is close to key tourist attractions such as Bath Cathedral, the Roman Baths, and Pulteney Bridge.

The 51,632 square-foot asset is multi-let to five tenants, spanning both office and retail spaces. Four office tenants occupy the majority of the building at an average passing rent of around £22 per square foot. Revenue is expected to increase through rent reviews in the short term and lease renewals or re-lettings in the medium term. A vacant retail unit on the property is currently under offer to a local retailer, indicating strong demand for well-located accommodation in Bath.

Laura Elkin, Portfolio Manager of AEW UK REIT, commented, “We are pleased to have purchased this very well-located, mixed-use asset at a day one yield that will be accretive to the Company’s earnings and brings the REIT one step closer to full deployment, with just £3m left to invest. Completion of the acquisition continues the strategic reinvestment of capital generated from recent sales into higher-yielding assets in core urban locations.”