AEW purchases £14.2m block let to NHS Trust

(Source: Property Week – 24th July 2018)

The property has a secure lease term of 20 years with 5 yearly rent reviews linked to inflation, and the purchase price reflects a net initial yield of 5%.

Comprising 21 purpose-built blocks of residential accommodation, the 7.5 acre site is an important part of the hospital’s infrastructure and predominantly houses NHS staff, trainee doctors and their families.

Ian Mason, portfolio manager at AEW UK Real Return Fund, said: “This acquisition takes the Fund’s NAV to over £100m and is a great addition to the portfolio, with its long lease term with inflation linked reviews and attractive yield. We are pleased to have secured this within the context of the government mandate for the NHS and its associated trusts to sell land and buildings to maximise returns, whilst retaining properties for NHS use, which is mutually beneficially for private investors and the NHS.”

Cushman & Wakefield and Johnson Tucker acted for AEW.

Jacques Esterhuizen at Cushman & Wakefield added: “We have seen a real shift in institutional appetite towards alternative investment opportunities to complement traditional asset classes. In the year ending 2017, the alternative sector accounted for circa 28% of total spend and we expect this figure to increase by the end of 2018 as investors continue to favour comparatively defensive assets offering stable, long term income in the current climate.”

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