BMO Commercial Property Trust has increased the portfolio’s industrial weighting to 29.3% following the acquisition of two high-quality logistics assets in the UK midlands. The fund has further strengthened its exposure to the sector with the commitment to two logistics developments, originating from its existing portfolio, with this combined investment activity totalling €91.5m (£76.5m).
The first acquisition comprises Orion One and Two of Derbyshire’s 200-acre flagship redevelopment scheme, Markham Vale, which was purchased for €53.2m (£44.5m), reflecting a net initial yield of 3.7%. The asset, which was completed to the highest standards in April 2021, benefits from a strategic logistics location adjoining junction 29A of the M1 Motorway. The two purpose-built units comprise 224,424ft² and 75,958ft² respectively and are each fully let to strong covenants on newly agreed 10-year leases.
BCPT has also acquired Unit 4 of Quintus Business Park in Burton-Upon-Trent by way of forward funding the development of a new 171,550ft² logistics warehouse for a total consideration of €25.7m (£21.5m), reflecting a yield of 4.84%. Construction of the high specification property, which is targeting a BREEAM Excellent rating, is underway, with completion expected in July 2022. A pre-let has already been agreed on a 15-year lease term.
Further to these acquisitions, and in response to supportive market conditions, BCPT has committed €12.5m (£10.5m) to the speculative development of two logistics schemes from within its portfolio, comprising a 52,000ft² mid-box logistics unit at Estuary Business Park, Liverpool, and a 35,000ft² new multi-unit trade counter at the Cowdray Centre in Colchester.
Richard Kirby, Lead Manager of BCPT commented: “These latest investments accord with our stated goal of recycling capital to increase BCPT’s exposure to prime, modern industrial and logistics assets in established locations. This activity simultaneously has the added benefit of increasing the Fund’s tenant roster with leases linked to RPI and exposure to assets achieving strong underlying ESG performance. Our commitment to the developments at Colchester and Liverpool, coupled with encouraging early tenant interest, is demonstrative of the value embedded within the existing portfolio.”
