Cyril Leonard advised Grosvenor Land Holdings plc and Oakburn Properties plc on the sale of their joint interests in a property in Portsmouth, comprising two retail units with three floors of residential accommodation above, comprising 18 flats. DKF Developments Limited purchased the property for a price totalling £2.62million.
The retail units are let to Woolwich plc and Subway Southampton Ltd (on assignment from Secondsite Property Holdings) and are currently producing a rental income of £130,000. Of the residential element 13 of the 18 flats are let on assured shorthold tenancies and five are currently vacant, producing a rental income of £64,080.
This gave DKF a net initial yield of 7% increasing to 7.92% upon letting of the vacant residential units, allowing for purchase costs at 5.75%.
Labyrinth Properties acted for the purchaser, DKF Developments, which is a local property company with several properties of a similar nature in and around Portsmouth.
DKF Developments plan to let the remaining vacant residential units in order to maximise income from the upper floors.
