C&N gears up for a big programme

Developer City & Northern has continued the sell-off of its investment portfolio with the disposal of eight properties for more than £9m.

Developer City & Northern has continued the sell-off of its investment portfolio with the disposal of eight properties for more than £9m.

The Gateshead developer put the portfolio, which comprised of four industrial buildings, three high street retail units, and an office building, on the market in November through the Newcastle office of DTZ.

City & Northern has now either sold or has under offer £40m of property in the past 12 months as it gears up for a major development programme in the next few years.

The mixed portfolio, which had a £9m price tag, was sold early last week to a private investor client of Bissett Kenning & Newiss for around £9.1m.

Greg Davison, investment director at DTZ, said the portfolio, which included industrial and office properties in the Team Valley, Newton Aycliffe, Birtley, Newcastle Business Park, Newcastle city, and retail properties in Redcar, Berwick-upon-Tweed and Chester-le-Street, attracted interest from national and local private investors and property companies.

He said: "We had expressions of interest from a number of parties but decided not to go to best bids after we had an approach above the asking price. Both parties wanted to have the deal agreed in principle before Christmas so we went with that one."

The deal represents an initial rental yield from the eight properties of slightly less than 7% based on an annual rent roll of £664,000.

Leases range from three to 13 years in length across the portfolio and DTZ has highlighted the potential to increase rents by nearly 10% on some of the units, particularly on the Team Valley, based on recent lease deals in the area.

Tenants include sports apparel company Fox Racing, and O2 at Newcastle Business Park, where the mobile phone company houses its main switching station for the North-East. The retail property includes shops on the prime retail pitches of Berwick-upon-Tweed and Redcar, Cleveland.

Mr Davison said: "We were able to take advantage of a very strong market at the moment. There are plenty of opportunities to add value to the portfolio through new leases, rent reviews and restructuring some of the shorter leases."

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