BMO Real Estate Partners (BMO REP) has completed the forward-purchase of an industrial asset in Milton Keynes on behalf of a segregated mandate client for €7.8m (£7.05m), representing a net initial yield of 5.35%. The developer and vendor is Hampton Brook, a private developer specialising in the midlands and south-east.
The industrial asset, known as ‘Velocity’, comprises two newly built warehouse units totalling 48,000ft². The two self-contained units provide high specification and energy-efficient industrial accommodation, and each contains office space, kitchen and shower facilities, double-height access doors and generous parking provisions. Unit One, comprising 24,885ft², has been let to Essanet Limited, an IT consultancy company on a 16-year lease with no breaks. The 22,710ft² Unit Two has been taken by Arnold Laver & Company the British timber merchant, on a ten-year term.
Velocity benefits from a strategic South East industrial location in the Knowhill business district just 1.5 miles south of Central Milton Keynes and its national railway station, which has a direct service to London Euston in just 35 minutes.
Matthew Howard, Director, Property Funds at BMO Real Estate Partners commented: “This investment increases our client’s exposure to the strongly performing South East industrial market and is part of our strategy to reinvest capital from sales into income and growth assets. By having the conviction to commit to a forward purchase of this asset we benefited from accessing an undersupplied market at an attractive entry point. Our ability to pre-let the scheme ahead of completion to two high-quality tenants at attractive terms is testament to the quality of this asset developed by Hampton Brook.”
Ian Jackson, Director of Hampton Brook, added: “We are delighted both of these units have been let in such a short timescale. Velocity is the only new build scheme of this size in Milton Keynes and our decision to speculatively develop reflects our local knowledge and confidence in the market.”