The Fund has sold a retail warehouse on the Old Kent Road, SE15, for a price in excess of £10 million, reflecting a net initial yield of less than 2.5%. The site extends to 0.7 acres which translates to a capital value per acre of £14m. We think this is a great result and demonstrates the premium prices achievable for sites with alternative use, regardless of their existing retail use. The property is let to B&M Bargains on a lease expiring in October 2025 and was valued at £6.55 million at the March 2019 valuation. The price achieved reflected a 60% increase.
The asset was acquired for £2.3 million in 2001, delivered almost unbroken income during the long hold period and produced an IRR of 15.45% per annum over the 18 years. 40% of our remaining retail warehouse and supermarket weighting is located in Greater London for precisely this reason. The team has worked very hard to achieve this result making representations to the local planning authority to re-zone the site for residential use and petitioning for increased massing on the site over a period of years. We rebuffed multiple off market approaches during this period and when satisfied we had maximised the potential, we took the decision to selectively market the asset and captured this significant premium.