Elite UK REIT acquires three new properties for $16m

The properties generate gross rental income of $1.4m annually.

Elite UK REIT plans to acquire three freehold or virtual freehold government infrastructure properties and workspaces in the UK for $16m (£9.2m).

The properties include Priory Court in Dover and Custom House in Felixstowe, both located in England, as well as Tŷ Merlin in Carmarthen, Wales.

The REIT entered into a conditional sale and purchase agreement with Elite Phoenix Limited, a wholly owned subsidiary of Elite UK Commercial Fund III, for the acquisition.

The new properties generate gross rental income of $1.4m (£0.8m) annually. The purchase consideration represents a 7.6% discount to the average of independent valuations conducted by Colliers and CBRE.

Priory Court and Customs House are currently tenanted to the Home Office, a UK government agency. Priory Court has a net internal area of 72,052 sq ft, whilst Customs House is a six-storey property with a net internal area of 52,578 sq ft used as a Customs Office.

Meanwhile, Tŷ Merlin in Carmarthen is tenanted by the Department for Environment, Food and Rural Affairs (DEFRA). It has a net internal area of 15,337 sq ft and serves as DEFRA’s headquarters for South and West Wales.

“Upon completion of the Proposed Acquisition, our enlarged portfolio of properties in the UK will deliver a higher portfolio yield and positive reversionary potential from stable government-backed income stream with triple-net leases and rents collected in advance,” Joshua Liaw, CEO, at Elite UK REIT Management, said.