Reading: Kier planning to forward sell Gateway site

According to CoStar, Kier has instructed LSH to source an investor for an arrangement which will see Kier sell off 110,000 sq ft of largely pre-let space at the leisure park, comprising seven units and 333 car parking spaces.

Kier and LSH are quoting £39.91m for the site, which has detailed planning permission and is 84% pre-let to Premier Inn for 25 years; Burger King for 20 years; Costa for 15 years; and Toys R Us and Wren Kitchens, both on 10-year leases.

The site produces a total rental income of £2.234 million per annum. Around 48% of the income is subject to fixed rental uplifts.

There are just two units – one of 6,000 sq ft and one of 8,500 sq ft - left to let.

Kier bought the site alongside Investec in 2014 for circa £29m. In March 2016 it gained consent for 175 new homes, 50,000 sq ft of retail warehousing and a 120-bed hotel. Construction will commence in April, with practical completion due early 2018.

Kier has sold the housing to Bewley for a 175-unit residential scheme and exchanged agreement for leases towards the end of last year with Premier Inn for a 120 bed hotel, as well as a drive through Costa Coffee and Beefeater Restaurant.

Kier has also exchanged agreement for leases with Toys R Us and Wren Kitchens for two 20,000 sq ft retail units anchoring each corner of the scheme.

It is also understood to be in talks to lease the drive-thru restaurant to Burger King while Volvo and Nissan are believed to be close to signing for the two car showrooms.

There will also be a two-terrace Trade City scheme, but this will not form part of the sale.

The site to the south of Reading, close to junction 11 of the M4, is a major gateway development site close to Green Park and Reading FC’s Madejski Stadium which has remained vacant since HP moved off the site in 2006.

Haslams and LSH are joint letting agents for Kier Property.

Source: CoStar