Lettings at Bedford Retail Warehouse Park

 11 September 2015

Schroder Real Estate Investment Trust Limited

(the ‘Company’)


Following the Company’s acquisition of St. John’s Retail Park in Bedford on 15 May 2015 for £31.8 million, early progress has been made implementing the business plan.  An agreement for lease has been exchanged to let the single vacant retail warehouse unit totalling 4,860 sq ft to Tapi Carpets and Floors Limited at a rent of £121,500 per annum.  This compares to an assumed rental value on acquisition of £109,400 per annum or £22.50 per sq ft, and an average retail rent for the scheme as a whole of £16.00 per sq ft.  Completion of the lease is conditional on landlord’s works which are anticipated to complete in mid September at a cost of approximately £30,000.  Tapi will benefit from 12 months rent free spread over the second and fourth year of the term.

Tapi are a retailer of carpets and flooring. They are new entrants to the market and have opened nine units to date with the business plan to open 100 stores over the next three years.

The Company has separately completed a lease extension with Maplin Electronic Limited, who has  been occupying a 4,481 sq ft unit at the park on a lease which was due to expire in March 2018 at £81,576 per annum or £18.20 per sq ft.  The lease has been extended by a further five years and is now due to expire in March 2023.  The incentive to the tenant is six months rent free.  The new lease provides for a rent review in March 2018 with the Tapi agreement at £25 per sq ft providing good indications for a future uplift.

Finally, since acquisition two lettings totalling 9,639 sq ft have completed in the adjoining office building, Howard House, at an aggregate rent of £91,106 per annum or £9.50 per sq ft.  Approximately 3,200 sq ft remains available to let in Howard House.  With no vacant retail units, the remaining floor at Howard House represents a low void of 0.9% by rental value over the scheme as a whole.

This activity increases the rent at St. John’s Retail Park, post rent free periods, to £2.2 million per annum, which reflects a yield of approximately 7% on the gross acquisition cost totalling £32.1 million.  The activity also increases the average unexpired lease term, assuming tenants break at the earliest opportunity, to 7.1 years at the park compared with 6.9 years on acquisition.  Further initiatives are being pursued including rent reviews, lease extensions, right sizing certain retailers and widening the planning consent in order to further increase the rental tone and improve tenant mix.

For further information:

Schroder Real Estate Investment Management Limited:
Duncan Owen / Nick Montgomery
020 7658 6000
Northern Trust:
David Sauvarin
01481 745529
FTI Consulting:
Dido Laurimore / Ellie Sweeney
020 3727 1000
UK 100

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