27 Aug 2020

M7 sells long let healthcare investment

M7 Real Estate (“M7”), the pan-European investor and asset manager, announces that it has completed the sale of a 28,638 sq. ft property in Nottingham’s retail district on behalf of M7 Real Estate Investment Partners III (“M7 REIP III” or the “Fund”).

The property which has dual frontage to both Upper Parliament Street and Long Row was purchased in 2016 and originally included a Tesco’s local store, a GP surgery and an independent barbershop.

The asset, which is predominantly let to Nottingham City GP Alliance (NCGPA), providing NHS care to 336,000 patients across the city, has been sold to a regional investment company. This sale follows on from the earlier sale of the adjoining Tesco unit, that was also in the Fund’s ownership.

Prior to the sale M7 negotiated a new 10-year, annual RPI linked lease, with NCGPA which expires in 2029. NCGPA retained their existing ground floor accommodation but also expanded into the vacant first-floor space.

Victoria Lane, Asset Manager at M7, commented: “Since purchase, the asset management of this investment has been intensive. To extract as much value as possible, we sold the Tesco unit early and then working together with NCGPA, were able to tailor a lease contract that met their ambitions to expand the care they provide locally. Terms were thus agreed on the void space and a new longer-term lease to a strong covenant put in place. Having created a stabilised asset with a strong income profile we are very pleased to have sold the asset ahead of business plan”.