AEW UK REIT, which owns a diversified portfolio of 30 regional UK commercial property assets, announces the acquisition of a c. 97,000 ft² single-let industrial building in Deeside, North Wales, for c . €4.9m (£4.3m), reflecting a Net Initial Yield of 7.9% and a capital value of €51.2 (£45) per ft².
The asset, which is located within the established Deeside Industrial Park, is fully let to global enterprise Magellan Aerospace, for a term of just under 5 years to break and just under 10 years to expiry. The current passing rent of €4.2 (£3.75) per ft² is significantly below that seen at other competing centres within the North West, such as in Warrington and Manchester.
Deeside Industrial Park has been established since the 1970s and totals in excess of 600 acres, comprising over 5 million ft² of industrial and warehouse accommodation attracting a variety of manufacturing and distribution companies. The estate benefits from its close proximity to the national motorway network, being within 5 miles of both the M56 and M53.
Commenting on the deal, Alex Short, the Company’s Portfolio Manager at AEW UK Investment Management LLP, said, “Deeside has seen robust occupational performance over the past 18 months with overall vacancy levels on the estate falling. Occupiers from across the region have seen Deeside as an attractive location due to higher rental levels in competing centres which have also risen sharply. The acquisition pricing also looks attractive as it is well supported by the asset’s underlying vacant possession value which is an important metric for the protection of downside risk.”
