SIPP 14 – Corner of New Street and Trinity Street, Dorchester
SIPP 14 – Corner of New Street and Trinity Street, Dorchester
This was part of four commercial units that we purchased directly from the developer, in a very much improving location in Dorchester, at a price of £865,000.
A new lease was in place for 10 years with the quoted company Laura Ashley at a rent of £47,500 per annum, for a term of ten years with no breaks. The rent review is at year 5 as with most commercial leases.
The property is visually very effective in design and Laura Ashley has had excellent trading since opening in September 2007. A loan of only £325,000 was used from Nat West and this is likely to be repaid within the term of the lease.
The location is very much improving, next door to the new Post Office (another of our pension purchases) and strong future rental growth is expected.
The mortgage has reduced under the repayment terms. More importantly, an investor that put in £50,000 into the syndicate will receive an annual income of £ 4000 (subject to inland revenue maxima) upon mortgage repayment, estimated to be in 5 years time.
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