Warehouse REIT to acquire 570,000 sq ft warehouse portfolio for GBP44m,
Warehouse REIT, an AIM-listed company that invests in e-commerce urban and last-mile industrial warehouse assets in the UK, is to acquire a portfolio of five single-let and multi-let warehouse assets located across the UK (the Portfolio), totalling 570,000 sq ft (the “Transaction”), owned by Greenstone Property Holdings Limited (“Greenstone”).
The purchase price of GBP43.6 million reflects an attractive blended net initial yield of 6.7 per cent and provides a combined WAULT of 5.5 years.
Located in established logistics markets, the portfolio is 90 per cent occupied on leases with a total contracted annual rent of GBP2.95 million. The Portfolio has been independently valued by CBRE as at 29 September 2020 at GBP44.55 million in aggregate.
The individual assets are:
Gateway Park, which accounts for 56 per cent of the portfolio by value, is a 28-unit industrial estate totalling 220,000 sq ft adjacent to Birmingham Airport and less than two miles from Junction 6 of the M42, a key arterial route in the Midlands. The park generates GBP1.3 million per annum of contracted rent and is let to a high-quality tenant mix including global 3PL FedEx, pan-European freight distributor Circle Express and Swissport cargo services.
A 50,000 sq ft unit on Viables Business Park in Basingstoke, occupied on a lease expiring in 2026 by global golf manufacturer TaylorMade and serving as its European headquarters, guaranteed by Adidas. The property is let off a low passing rent of GBP422,000, reflecting sub GBP9 psf and is ideally located less than five minutes’ drive from the town centre, whilst Junction 6 of the M3, which connects London and the South of England, is just 2.5 miles east of the park.
Chittening Industrial Estate in Avonmouth, outside of Bristol and within one mile of the new M49 motorway junction, is a 200,000 sq ft, 10-unit scheme generating GBP545,000 per annum of contracted rent. It is 88 per cent let to a diverse range of tenants including Palletways UK, Encon Insulation and DS Smith.
A three-unit warehouse property on Newport Road, Cardiff, totalling 50,000 sq ft. The asset generates GBP519,000 per annum of topped up rent.
A 54,000 sq ft warehouse in Ebbw Vale, South Wales, leased to global 3PL DHL, on an eight-year term off a low rent reflecting just GBP3 psf.
These latest additions continue the deployment of July’s GBP153 million equity raise and take Warehouse REIT’s portfolio to over seven and a half million sq ft, providing multiple opportunities for value creation through asset management, whilst further improving cost ratio efficiencies.
Andrew Bird, Managing Director of the Investment Advisor, Tilstone Partners Limited, says: “This is an increasingly rare opportunity to acquire an immediately accretive and diverse portfolio of assets which fits with our stated investment strategy, whilst offering both short and longer-term asset management opportunities through a mixture of vacancy and short income.
“Despite strong competition for industrial assets, as an increasingly diverse range of occupiers seek to ensure their businesses are fit for purpose as e-commerce penetration accelerates, we continue to originate and successfully execute on attractive transactions. The focus remains on deploying the balance of the equity from July’s capital raise, leveraging our local market relationships to secure off market opportunities, in order to further improve the portfolio metrics and generate shareholder outperformance.”