Orchard Street Investment Management has completed the acquisition of Merlin Park in Portsmouth for €21m (£19m), representing a net initial yield of 4.50%. The acquisition was made on behalf of a pension fund client from British Airways Pension Fund.
The property comprises seven industrial units completed in 2018 totalling 88,000ft², located on Portsea Island within Portsmouth’s main industrial area. The estate benefits from excellent connectivity to the city centre and nearby motorway network, operating as a genuine ‘last mile’ logistics estate. The property is fully let to four tenants and provides robust income from a diverse range of occupiers with a long weighted average unexpired lease term of 11.9 years to breaks (12.5 years to expiries) and a passing rent of €11.5 (£10.40) per ft² overall. Merlin Park boasts strong sustainability credentials including a BREEAM rating of ‘Very Good’ and all units benefit from roof-mounted solar panels, cycle stores and electric car charging points.
Harry Buxton, Acquisitions Manager at Orchard Street, commented: “We consider this best-in-class asset to be an excellent addition to our Client’s portfolio. The property provides resilient income from a diverse tenant mix, a long unexpired term significantly in excess of the market average, and strong sustainability credentials. This acquisition follows shortly after our purchase for another client of a multi-let industrial estate in an equally-undersupplied location, Hemel Hempstead, and reinforces our commitment to the positive fundamentals of the industrial sector.”
