Stenprop has acquired two MLI properties, comprising 18 high-quality units, in Glasgow and Stoke-on-Trent. The assets have been purchased in separate transactions for a total consideration of €12.1m (£11.1m), reflecting a blended net initial yield of 6.5%.
The Excelsior Industrial Estate on the south-west side of Glasgow was acquired for €5.7m (£5.2m) from CBRE GI. It is located less than one mile from Glasgow City Centre, in a market characterised by a shortage of stock which is underpinning vacancy rates below 5%. The estate benefits from excellent arterial connectivity, adjacent to the M8 and less than 200 metres from the M74. Comprising ten modern units, nine are currently occupied by a diverse range of tenants including trade occupiers and cash and carry. The estate generates a total annual passing rent of €381,648 (£350,133).
In a second transaction, Stenprop has purchased Tunstall Trade Park in Tunstall, just outside Stoke-on-Trent, a high quality, a modern property of eight units totalling 56,500ft², for €6.4m (£5.9m), from Clowes Developments. The estate is 100% occupied by a diverse tenant base including trade counters, self-storage and hi-tech manufacturing. The asset has a passing rent of €427,873 (£392,541). Strategically located within the Ceramic Valley Enterprise Zone, the region is characterised by a shortage of sub-10,000ft² industrial units, following strong take-up and a lack of new development in recent years. The property benefits from its adjacency to the A50, a major regional arterial axis.
Will Lutton, Head of Investment at Stenprop, commented: “Despite the ongoing macro-economic uncertainty, these two latest acquisitions demonstrate our ability to source attractive investment opportunities, both on and off-market, in locations underpinned by favourable demand-supply dynamics. Leveraging our local market expertise and strong relationships, the well-let assets enhance the existing portfolio, whilst also offering reversionary potential that will be realised via our proprietary industrials.co.uk platform.”
Julian Carey, Managing Director of Stenprop, added: “Passing five million square feet of MLI is a major milestone for Stenprop. Having made the strategic decision to transition the portfolio towards 100% UK MLI based on our belief that structural changes taking place in the UK would underpin warehouse occupier demand, we remain steadfast in our belief in the sector’s future prospects and our ability to translate this into attractive shareholder returns.”