Charities property fund targets Harrogate

Savills Investment Management (“Savills IM”), the international real estate investment manager, has today announced that its Charities Property Fund has sold three High Street shops in Chichester and Worcester for a combined price of £8.25 million. This reflects a yield of 3.95%. 

The three shops, which have an average of 7 years remaining on their leases, were let to Oasis, WH Smith and Costa Coffee. They were sold for an average of c. 20% above their valuation.  

The proceeds have been reinvested into the purchase of a prime leisure block in Harrogate for £8.55 million, reflecting a net initial yield of 4.7%. The Harrogate property comprises a newly developed block let to Five Guys, The Foundry, All Bar One and Moss Bros and has an average unexpired term of almost 12 years. Over half of the income benefits can be attributed to RPI linked rental increases.  

Harry de Ferry Foster, Fund Director of The Charities Property Fund, commented:

“The execution of these transactions has crystallized significant profit from the three sales which we have recycled into the growing leisure sector. Parliament Street in Harrogate occupies a fantastic retail location in which we see real opportunity and exhibits the combination of factors we look for – strong tenant demand, a restricted supply pipeline and an affluent catchment. Continuing our strategy of seeking to constantly improve the quality of the portfolio, we expect to benefit from longer leases and guaranteed rental increases.”