Barkby joint venture acquires first roadside asset
By Josh White
Date: Friday 15 Dec 2023
(Sharecast News) - Barkby Group announced the completion of the first acquisition through its joint venture with Meadow Partners on Friday.
The AIM-traded firm said the venture was established to acquire and develop a portfolio of roadside real estate assets in the UK.
It said the first acquisition in Stoke was secured at a total cost of £5.28m.
Meadow acquired the asset in September and is now transferring it to the joint venture at cost.
The acquisition financing adhered to the joint venture's established equity commitments, with Meadow assuming ownership and financing responsibilities for 97% of the venture, while Barkby would cover 3%.
To facilitate the acquisition, Barkby contributed an initial equity investment of £0.17m to the joint venture.
The board said the acquired site boasted 15,489 square feet of lettable space divided among four units with an average rent of £18.87 per square foot, yielding a net initial yield of 7.95%.
It said the units were currently leased to well-known brands, including Costa Drive Thru, TGI Friday's, Nando's and Wagamama, generating £0.41m in net operating income.
The average remaining lease term stood at 11.6 years, and with lease breaks considered, it was 9.4 years.
Notably, 10% of the projected net operating income was linked to retail price index (RPI) uplifts.
The site also offered substantial parking capacity, with 239 spaces.
Barkby said that presented an opportunity to incorporate at least 12 ultra-fast electric vehicle (EV) chargers without incurring capital expenditure for the joint venture.
Each of the charging bays had the potential to generate an estimated annual income of £4,000 over a 20-year lease period, with annual RPI uplifts.
"We are pleased to have completed the joint venture's first acquisition," said executive chairman Charles Dickson.
"The Stoke asset has scope for several accretive investment opportunities, not least the installation of much-needed electric vehicle charging infrastructure.
"This acquisition follows practical completions at Barkby's wholly owned assets in Wellingborough and Maldon, which are both fully let and together generate over £500,000 of annualised rental income."
At 1016 GMT, shares in Barkby Group were down 5.94% at 5.97p.
Reporting by Josh White for Sharecast.com.
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