By Ian McConnell
AEW UK REIT said today it had completed the sale of 225 Bath Street in Glasgow for £9.3m, with the building to be demolished and replaced with a 527-unit student accommodation development.
The investment company said the sale “realises a long-term change-of-use strategy for the asset, with contracts for the sale having been exchanged with a subsidiary company of IQ Student Accommodation in October 2020”.
It added: “As stated in AEWU’s announcement on 11 February 2022, planning consent has been gained by IQ for the demolition of the property and development of a 527-unit student accommodation scheme.”
AEW UK REIT said the sale agreement had required it to “negotiate with tenants to bring the asset to vacancy and, as a result, following its sale the occupancy rate for AEWU's remaining portfolio will increase to 91.60% from 86.97% as at 30 June 2022”.
It added: “Reinvestment of the sale proceeds into pipeline assets under exclusivity is expected to provide a significant boost to the company’s earnings due to both higher levels of anticipated income receipts and lower running costs.”
Laura Elkin, portfolio manager of AEW UK REIT, said: "As the culmination of a long running business plan, we are delighted to see this sale complete. The disposal not only maximises the value of the asset but will increase occupancy levels across the remaining portfolio, reduce running costs and boost earnings, once capital is reinvested. The proceeds from the sale are already under offer to assets in exclusivity and, as such, we expect to make further purchase announcements in the coming weeks."
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