M7 Real Estate, acting on behalf of M7 Real Estate Investment Partners VI (M7 REIP VI), has acquired five adjacent warehouse units let on a long-term lease to Eddie Stobart in Workington, Cumbria for €7.17m (£6.3m), representing a net initial yield of 10% and a capital value per ft² of €15 (£13.22). The asset has been acquired from the Stobart Group.
The units, four of which are interlinked, are situated on the established 45-acre Lillyhall Industrial Estate and comprise a total of 476,000ft². Four of the units are occupied by Eddie Stobart on a ten-year lease without break. The lease was successfully renewed in March 2018 and is subject to RPI linked rent reviews at years two and seven. The total units are let at €1.5 (£1.31) per ft² and generate a total rental income of €767,934 (£675,000) per annum.
In addition to warehouse space, the buildings provide some additional external office space, a series of level loading doors across all the units and significant parking provision. The site also includes adjacent underutilised land with potential for future development.
Will Mitchell, Asset Manager at M7, commented: “The fundamentals of this asset, including the fact that it is located on an established long let industrial estate and offers an attractive day one yield with scope to add value, make it a perfect fit with the M7 REIP VI strategy. The continual reduction in the supply of large industrial space, coupled with an increase in demand for accommodation such as this, is supporting positive rental growth and we anticipate this to be realised going forward. It was a pleasure dealing with Roebuck Asset Management on this transaction which has no doubt added to our successful working history.”
Charlie Seaton, Director of Roebuck Asset Management, said: “Having completed a range of initiatives at the property, it was an optimal time to sell. We were delighted to work with the M7 team again on another successful transaction.”
