Disposal

RNS Number : 6415Y

Invista Foundation Property Tst Ltd

05 March 2012

 





05 March 2012

Invista Foundation Property Trust Limited

(the 'IFPT' / 'Company' / 'Group')

Invista Foundation Property Trust exchanges contracts to sell BT Office Building in West Bromwich in £19.5m transaction

Invista Foundation Property Trust announces that it has exchanged contracts to sell its office property let to British Telecommunications PLC ('BT PLC') in West Bromwich for £19.5 million, reflecting a net initial yield of 5.8%, assuming normal purchaser's costs.

The property is a newly completed office development which IFPT committed to buy in February 2010 and subsequently acquired in October 2011 for £14.86 million, reflecting a net initial yield of 7.7%.  The sale enables the Company to realise the strong and swift capital appreciation of this asset, as the sale price reflects a 31% uplift compared to its acquisition price and an uplift of £0.6 million or 3.2% compared with the independent valuation as at 31 December 2011 of £18.9 million.

The 75,000 sq ft property is located on the edge of West Bromwich town centre and is let to BT PLC for 15 years with effect from 21 October 2011 at a rent of £1.2 million per annum with fixed uplifts of 3% per annum.

The transaction adds to the Company's cash reserves and the proceeds will either be redeployed in a combination of higher yielding investment opportunities and capital expenditure within the existing portfolio or be used for debt repayment.  The use of cash funds in these ways should be earnings accretive to the Company's dividend cover by either improving the overall level of rental income or reducing the cost of debt.

Commenting, Duncan Owen, said:

"We are pleased to realise a significant gain over the acquisition cost. The property benefitted from the new letting on a long lease, which is fashionable in the current market and therefore attracted a premium pricing. The surplus proceeds provide us with a number of options to support our strategy either through reinvesting in properties with good fundamentals that are capable of adding value through active management or, reducing the Company's debt over time."

-ENDS-

For further information:

Schroders Property Investment Management Limited Duncan Owen / Nick Montgomery	020 7658 6000
FTI Consulting Dido Laurimore / Daniel O'Donnell	020 7831 3113

 

END

 

 

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