Warehouse REIT has exchanged contracts to acquire a portfolio of seven industrial assets in the North West of England for €20.5m (£18.25m), reflecting a net initial yield of 7%. This latest transaction, which will complete over the course of today, brings the Company’s assets under management to €188.1m (£167m), as it continues to successfully deploy the proceeds of its AIM listing in September 2017.
The portfolio totals 326,254 ft² and comprises a diverse mix of asset types with an average unit size of 15,000 ft², as follows:
- Road One, Winsford (78,178 ft² warehouse)
- Parkway Zone 2, Deeside Industrial Estate, Chester (60,081 ft² production facility)
- Quantum Park, Manchester (46,507 ft² trade counter)
- Europa Trading Estate, Kearsley, Manchester (40,000 ft² warehouse)
- Wardley Industrial Estate, Manchester (38,901 ft² warehouse)
- Linkway Industrial Estate, Middleton (48,074 ft² warehouse)
- The Oakfield Centre, Sharston, Manchester (14,513 ft² warehouse)
All assets are situated in established industrial locations within the ‘Northern Powerhouse’ region. The assets each benefit from excellent motorway connections and are all either in urban areas or on strategic infrastructure links, 5 of the assets are within only 6 miles of Manchester City Centre – in line with the REIT’s ‘last mile’ investment strategy.
Demonstrating the strength of tenant demand for the portfolio, it has been acquired with less than 4% voids. A low average industrial passing rent of €3.93 (£3.49) psf presents a significant reversionary potential, while c. 72,000 ft² of space is subject to lease expires within the next year, providing management with a near-term opportunity to grow rents 12% to ERVs. Furthermore, potential planning for 24,000 ft² of additional space creates an opportunity to increase rents over the long term through this acquisition.
Commenting on the transaction, Neil Kirton, Non-Executive Chairman of Warehouse REIT, said: “This portfolio, and the attractive yield at which it has been secured, clearly fits with Warehouse REIT’s investment strategy of acquiring good quality, well-located assets that offer compelling opportunities to enhance value through asset management. We look forward to integrating these assets into our wider portfolio while we continue to source new opportunities to effectively deploy the remainder of our IPO proceeds in order maximise the income returns we deliver for shareholders.”
The Vendor was advised by Stewart Montrose.
