Legal & General Property (LGP) has forward funded a new distribution warehouse at Magna Park in Milton Keynes for a total consideration of GBP114 million, representing a net initial yield of 4.64 per cent.
Pre-let to Waitrose Limited on a 30 year term, the 938,449 sq ft unit is being developed by Gazeley, a developer, owner and manager of logistics warehouses and distribution parks.
Waitrose’s parent company, John Lewis plc, already occupies two warehouses on the park, totalling over 1.3 million sq ft.
Purchased on behalf of its annuity fund, Legal & General will be funding the development over the construction period.
The development, which is currently on site, is due for completion in November 2014 and will provide a major new distribution warehouse, including ancillary offices arranged over three levels, a gatehouse, secure yards, parking for 530 cars, 231 HGV’s and 117 tractors, and landscaped areas. With high sustainability credentials, the development is targeting a BREEAM rating of “Excellent”.
Adam Kerr, head of long income transactions at Legal & General Property, says: “This transaction represents a rare opportunity to fund a strategically located south east ‘super’ shed that is capable of delivering the quantum of space demanded by a top UK retailer. Underpinned by its quality of construction and a fundamental shift in the optimal location for logistic operators to access population centres, Magna Park in Milton Keynes has become the leading logistics park in the UK due to its easy access to London and the wider south east.”
Nigel Godfrey, executive director of Gazeley, says: “The quality of the real estate proposition, together with Gazeley's class leading delivery capability, ensured we secured our price expectations. We are delighted to continue our relationship with Legal & General with this deal. Work has just commenced and almost one million sq ft will be completed and handed over in under six months from now."