Ediston Property Investment Company plc (the “Company”) is pleased to announce that it has completed lease renegotiations on the 61,645 sq. ft. office property at Cutler’s Gate, Parkway, Sheffield with its sole tenant, Capita Business Services Limited.
The Company has granted a reversionary lease which extends the unexpired term from 10 years to 25 years. The annual rent passing will remain at c.£1.05m but the five yearly upward only rent review provisions will be replaced by annual uplifts in line with the Retail Price Index (RPI) throughout the term. The RPI increase will be capped at 3.00% per annum and collared at 0.00% per annum.
The lease will remain in the name of Capita Business Services Limited but the Company has secured a new guarantee from its parent company Capita plc for the duration of the term.
The transaction increases the weighted average unexpired lease term (WAULT) to lease breaks from 4.88 years to 7.63 years over the whole of the Company’s portfolio. The WAULT to lease expiries increases from 6.36 years to 9.12 years. Further, the transaction will have a positive impact on the NAV of the Company, increasing it by £1.3m.
Commenting on the transaction, Calum Bruce, Director – Investment at Ediston Properties Limited (the Company’s Investment Adviser), said: “This transaction has secured Capita as a tenant for 25 years, which reaffirms their commitment to the property. The asset now provides a long term secure income stream for the Company which will benefit from annual index linked rental uplifts.”