Stenprop acquired a modern, well-located industrial estate in Leeds and disposed of its 50% interest in an office building in London’s West End in line with its stated strategy to transition its portfolio to focus on UK multi-let industrial (MLI) property.
Stenprop has purchased Kirkstall Industrial Park in Leeds for €9.2m (£8.1m) from CBRE Global Investors at a net initial yield of 6.75%. It is located in a densely-populated residential and commercial area off the A65, one of the main arterial routes into the centre of Leeds from the west. It comprises 14 units, totalling 111,081 ft² of industrial space, with one vacant unit that Stenprop has already put under offer to a new tenant. The weighted average unexpired lease term is 5.4 years to lease expires and 4.1 years to lease breaks.
The company has also sold 50% interest in 25 Argyll Street for €26m (£22.8m). The sale price is an increase of approximately 4% above the September 2017 valuation. The 63,090 ft² building is let at an average rent of €74.4 (£65.15) /ft² to a mix of tenants, including H&M, Live Nation and Spotify.
Julian Carey, Executive Property Director of Stenprop, said: “We are making excellent progress in transitioning Stenprop into a focused UK MLI business. Kirkstall is located close to Leeds City Centre and benefits from very strong supply-demand dynamics, as evidenced by our early letting success. Leeds is a place we have been targeting for some time and we are delighted to have finally acquired a high-quality multi-let industrial estate in this important regional city. We believe there is a great opportunity to apply a programme of improvements and asset management initiatives to sustain high occupation levels and enhance the quality of the estate, and we will work with the existing occupiers on site as part of this. 25 Argyll Street has delivered very strong returns to us in the time that we owned it with our joint venture partners. This highly significant sale releases further funds to reduce our overall leverage and reinvest into MLI and is well timed immediately prior to our London listing later this month. We have a strong pipeline of future MLI acquisition opportunities which should maintain the momentum as we reposition Stenprop as a leading MLI business in the UK”.