Brixton plc has simultaneously exchanged and completed the purchase for £21 mln. (approx. 28 mln.) of a 133,000 ft² (approx. 12,300 m²) single distribution unit on Oldfield Lane, Greenford, adjacent to its existing Greenford Park holding, from British Land Industrial Limited.
The incorporation into Greenford Park will form a substantial estate of just under 1 mln. ft² and together with its other Greenford industrial holdings, Brixton will now own a total of 2.25 mln. ft² in this key West London location.
This property was constructed in 1998 and is let to Kuehne & Nagel Drinkflow Logistics with a surety from Scottish & Newcastle. The lease runs until December 2022 without break, and has a passing rent of £1.126 mln. p.a, equating to £8.44 per ft², and subject to a rent review in December this year.
This purchase reflects a net initial yield of 5.1%, and net equivalent and reversionary yields of 5.6%.
Tim Wheeler, Brixton's Chief Executive, commented: "This purchase represents another good opportunity for Brixton. If you look at CBRE's November Monthly Index they estimate that across the UK equivalent yields for distribution units have moved out by 65 bps since June to 5.65% and prime London industrial stock (excluding Heathrow) has fallen back 25 bps to 5%, the same as it was at the start of the year. We believe that the market would have paid close to 4.75% equivalent for this property in the summer and we see value enhancement here not least for its integration into our management regime. This is one of a number of investments that we are looking to acquire at what we see as a very interesting phase in the cycle."