M&G Real Estate has made a GBP22.6 million acquisition of a 106,910 square foot distribution warehouse in Park Royal, London, representing a net initial yield of 5.25 per cent.
The property was purchased from Standard Life Investments.
One Park Royal is let in its entirety to Enotria Wine Cellars Limited on a full repairing and insuring lease for a term of 15 years, expiring in May 2029. Following an expansion programme, One Park Royal is to become Enotria’s new UK headquarters.
Park Royal is the largest industrial area in Europe and home to around 2,000 businesses.
Adam Coulston, director, investment management at M&G Real Estate, says: “Investor demand for UK distribution warehousing has remained robust throughout 2014. Park Royal has seen strengthening tenant demand over the past 12 to 18 months due to its core industrial location in London, with good communication links and a significant critical mass of occupiers. We believe rental growth prospects are good, which will assist in achieving excellent returns for our investors.”
DTRE represented M&G Real Estate. CBRE represented Standard Life Investments.