Property investor Palace Capital has secured a significant letting to Dartford Borough Council at a shopping centre building in Kent following a £2.25m revamp of the building.
The Copperfields in Dartford is a small shopping centre with offices above and was acquired by the Palace Capital in October 2013 from Quintain.
Palace Capital later secured consent to convert the first-floor offices into 13 self-contained flats, with Dartford Borough Council now having agreed to take the nits on a ten-year lease.
Neil Sinclair, the chief executive of Palace Capital, said: "When we acquired The Copperfields there were vacant retail units, retail tenants with serious rent arrears and an office tenant where the lease had a break clause which had been exercised. Our brand of active management is to maximise value and income."
He added: "After meeting senior officers of the council to discuss their plans for the town, we placed a building contract to convert the vacant offices into flats. As a result, we have secured a gilt-edged tenant in a growth location, eliminated empty rate payments on the vacant offices and have secured an income stream until 2027."
This lease has no break and provides rental income of £146,500 per annum, inclusive of service charge, to Palace Capital, rising annually by 2.5 per cent. Dartford Borough Council has the benefit of a rent-free period until mid-April 2017 in lieu of works that it will be carrying out to the flats.