AEW UK REIT has completed the sale of its freehold high-street retail holding in Portsmouth.

Located at 208-220 Commercial Road and 7-13 Crasswell Street they sold for £3,900,000, reflecting a net initial yield of 9.9% and a capital value of £251 per sq ft. A sale at this price reflects around a 22% premium to the 30 June 2023 valuation of £3,200,000.

Following the completion of two new lettings to Kokoro and Specsavers earlier this year, the property is now fully let. This, coupled with the risk of the main tenant, Nationwide Building Society (Nationwide), being significantly overrented, prompted the decision to sell. The value of the asset is likely to deteriorate as Nationwide's lease becomes shorter, with the threat of the tenant leaving on expiry in 2029 creating the possibility of a long-term void.

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Laura Elkin, Portfolio Manager of AEW UK REIT said: "We are pleased to have sold this holding for a healthy premium to valuation, having completed the asset management strategy, and therefore maximised value. Going forward, the asset presents a potential risk to the Company's shareholders, which further justifies a sale at this point in time. The Company's focus for the deployment of capital continues to be on the consideration of further accretive investment opportunities, alongside re-investment into the existing portfolio where capex is needed in order to drive future performance gains."