M&G Real Estate has acquired two distribution units totalling over GBP17m on behalf of its UK property strategy for domestic and international institutional investors, managed by Dermot Kiernan.
The freehold of the 96,915 sq ft unit on Gascoyne Road, Barking has been purchased for GBP9,550,000, representing a net initial yield of 7.18 per cent, from Westbrook Partners. The property is let to Moss Bros Group on a full repairing and insuring lease which expires in 2021.
The second acquisition is the freehold of the 137,956 sq ft distribution unit Paragon, situated within the Denbigh West Industrial Estate in Milton Keynes. The property was purchased from PPG Southern for GBP7,640,000 representing a capital value of GBP55 per square foot. The property is leased to Charles Tyrwhitt until 2024.
In addition to the recent office purchases in Croydon and Guildford, these two latest deals bring the UK property strategy’s investment into the office and logistics sector to approximately GBP64m over Q3. This is consistent with Kiernan’s focus on South East office and warehouse assets with strong property fundamentals, attractive income profiles and the potential to add value through active asset management.
Kiernan says: “These are both high quality, well-located distribution units where there is good tenant demand and a limited supply of new space. Consistent with the acquisition of Croydon and Guildford earlier in the quarter, we believe that these investments will benefit from the return of rental growth in the South East industrial and office markets.”
M&G Real Estate was advised by Deloitte Real Estate for Unit B at Gascoyne Road in Barking and by Jones Lang LaSalle for Paragon in Milton Keynes.