UK coal offers more than 8000 acres for sale

In one of the largest let land offerings in recent years, UK Coal is selling 8141 acres of land with 42 houses and cottages across several estates between Newcastle upon Tyne and Birmingham.

With a guide price of £45m for the whole, the land represents around 20% of UK Coal’s agricultural investment portfolio.

FBTs account for 5374 acres and half of the rent roll on the land for sale, while 1105 acres are let on Agricultural Holdings Act tenancies. Almost 1200 acres is farmed in hand, with the remainder of this mixed rural portfolio occupied on a wide range of other agreements such as commercial and other leases, grazing licences and residential property on Assured Shorthold Tenancies.

Because many of the properties are on the urban fringe, there are substantial rental growth and development prospects as well as diversification opportunities, according to agent Smiths Gore.

“It’s a real mixed portfolio,” said Smiths Gore’s Gerald Fitzgerald, who considers there is a good prospect that it will sell as a whole.

The property is for sale with no development clawback, so the seller is not reserving any financial right to increased value from subsequent development sale of the property.

However, with a potential 8.6m tonnes of coal available from the land through opencast mining, the seller is retaining options to do this on eight sites for up to 15 years. If UK Coal chooses to exercise these options, the new owners will be paid an agricultural rent plus £2/t for any coal produced from their land.