M&G Real Estate confirmed the acquisition of the long leasehold interests in Units 1200 and 1300, Magna Park in Lutterworth for £27 million (approx. €31.7 million), representing a net initial yield of 8.48% (£58/ft²). On behalf of its internal clients, M&G Real Estate now owns a total of five properties in Magna Park, equating to over 1.5 million ft² (approx. 139,350 m²).
The transaction is structured as a sale and leaseback and let to Renault UK Ltd and Nissan Motor Parts Center B.V. at an initial rent of £2.44 million (approx. €2.9 million) per annum (£5.25/ft²). The units are subject to two 15-year full repairing and insuring leases with five-yearly tenant breaks and upwards only rent reviews, subject to minimum uplifts.
In addition, the property provides some 464,824 ft² (approx. 43,180 m²) of warehouse accommodation, including some six acres of expansion land offering the potential to expand the existing facility by c. 138,000 sq ft, or create further yard or storage space.
Commenting on the acquisition, Adam Coulston, Director, Investment Management, M&G Real Estate, said:
“Magna Park lies at the heart of the Golden Triangle – a hub formed by three major motorways – making it one of Europe’s most successful dedicated logistics centres. Given M&G Real Estate’s already significant interest in the park, this provides another welcome acquisition. It was acquired off an attractive capital value per sq ft, providing potential returns going forward, with opportunities for medium term asset management plays relating to the expansion land.
“We are witnessing increased occupier demand for units of this type which we expect to increase as the UK economy strengthens further, offering the potential for rental and capital growth. This all combines to make the property a highly desirable asset.”
M&G Real Estate was advised by Lewis Ellis LLP and North Rae Sanders; the vendor was represented by CBRE.