RDI beats retail apocalypse with three new lettings

The London-listed real estate investment trust said the three leases were previously let to retailers subject to recent company voluntary arrangements (CVAs) or administrations, although it noted each lease was agreed “well in advance” of the previous tenants vacating and at rents ahead of the pre-CVA gross annualised rent.

It said the new lettings comprised a total of 37,850 square feet of space, and would generate £1m of gross annualised rental income.

Discount supermarket Aldi and low-cost health club The Gym Group had signed at Priory Retail Park in Merton, south west London, on long leases of 20 years and 15 years respectively.

The new lettings were agreed at more attractive terms, the RDI board reported, with no void period in the interim.

Priory Retail Park remained fully occupied, with the new tenants complementing the current mix of bulky goods retailers and food and beverage operators, continuing to drive footfall at what the board described as a “well-located” asset.

Bargain Buys - a new concept from the firm behind Poundstretcher - had increased its unit size at Banbury Cross Retail Park in Oxfordshire, signing a seven-year term on the 7,477 square foot vacant adjoining unit, taking its total holding at the estate to 17,533 square feet.

Elsewhere across RDI's six retail parks, the board said the gross annualised rent on a 10,000 square foot unit at Queens Drive Retail Park in Kilmarnock, which was previously subject to a CVA, had been reinstated to the previous passing rent, meaning a 33% increase on gross annualised rent to £0.2m.

RDI explained that its entire retail park portfolio was currently 96.2% occupied - a 140 basis point improvement on its last reported figures.

“These three new lettings, to strong covenants, on long leases with favourable terms resulted in a 40% increase on the previously reported gross rental income and is marginally ahead of pre-CVA rents,” said RDI property director Adrian Horsburgh.

“Our ability to proactively secure tenants and avoiding any vacancies in the current challenging market, is a credit to both the underlying assets' quality and our asset management team's hard work.

“In the current market environment our focus remains on driving value from our existing assets and leveraging opportunities to generate income, maintain high occupancy levels and boost footfall.”