In September 2016 we were pleased to announce that we had completed a forward funding property investment in a Leeds based retail and leisure development let on new long leases to three high quality tenants: Aldi Stores Limited, Pure Gym Limited and Poundworld.
All three of the leases have five yearly upward only rent reviews and two are linked to the Retail Prices Index.
The purchase price represented a running income yield of 6.94% once the asset is fully income producing. This is a significant discount to comparable assets which had recently been marketed or traded at levels around 5.2% to 6.0%.
By forward funding, properties can often be acquired at a significant discount. Further benefits accrue from buying properties this way since stamp duty land tax is payable on the value of the land only.