(Alliance News) - AEW UK REIT PLC on Wednesday said it acquired a freehold, mixed-use asset in York city centre predominantly used as a car park for around GBP10.0 million, reflecting an "attractive" net initial yield of 9.3%.

Following the purchase, the UK regional commercial property-focused real estate investment trust said cash available for deployment into high yielding pipeline assets is around GBP15.0 million.

London-based AEW UK said the 99,769 square feet asset is multi-let to five tenants, of which 75% of income is received from National Car Parks Ltd.

AEW UK noted that National Car Parks have occupied the 297-space car park since 2005 and have a further nine years remaining on their lease. It also described National Car Parks as "one of the UK's largest car park operators with an estate of approximately 189,000 spaces over 642 sites".

The site total 0.8 acres and is located inside the York city hall, AEW UK explained, bordering the historic centre of the city.

Another four tenants occupy the ground and first floor retail and office accommodation fronting onto George Hudson Street, the company added.

"We are pleased to have purchased this very well-located mixed-use asset at a day one yield that will be accretive to the company's earnings. Our due diligence has shown that NCP trades well from the location and we expect this to continue given the popularity of York as a destination," said AEW UK Portfolio Manager Laura Elkin.

"Completion of the acquisition marks the strategic reinvestment into higher yielding assets of capital generated from recent sales. We continue to analyse an interesting pipeline of potential acquisitions and expect to make further purchase announcements in due course, which will bring us closer to our short-term target of full deployment of capital."

Shares in AEW UK were up 1.9% to 98.00 pence each in London on Wednesday late morning.

By Greg Rosenvinge, Alliance News reporter

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