West Midlands Pension Fund has acquired an office asset in West Yorkshire, England, from real estate investment trust RDI.
Listed RDI said it has agreed to sell City Point in Leeds for £26.1m (€29.9m) to the UK local authority pension fund.
The 5,699sqm office was originally acquired as part of the company’s AUK Portfolio acquisition in March 2016 for £21.6m.
RDI said the sale price represents a net initial yield of 5.8% and a 15.3% premium to the last reported market value.
The geared internal rate of return over the investment period was over 20%.
RDI said the disposal is in line with its strategy of recycling capital out of mature assets and into new growth opportunities.
Mike Watters, the chief executive, said: “The disposal of City Point, Leeds represents yet another example of delivering value from the AUK acquisition.
“After two years of owning this asset, we have delivered an excellent 20.6% premium to the acquisition price, whilst also de-risking the portfolio by reducing our exposure to a maturing regional office investment market and an asset with a number of upcoming lease breaks and expires.”