Stenprop has announced the completion of the acquisition of 100 industrial units in five separate transactions for an aggregate price of £16.7 million.
The acquisitions comprise of:
- Hillfoot Industrial Estate, Sheffield.
- Armthorpe Enterprise Centre, Doncaster.
- Trident Business Centre, Middlesbrough.
- Units 1-10, Parkway Business Centre, Deeside.
- Units 1-8, Forth Industrial Estate, Edinburgh.
- 5, Holbrook Enterprise Park, Sheffield.
The Hillfoot, Armthorpe and Trident estates were acquired as a portfolio from Westbrook Partners for £10.2 million, reflecting a net initial yield of 6.0%. They have 81 units, totalling 137,695 sq ft, of which 11% are vacant.
The total annual passing rent of £642,460 equates to an average rent of £5.27/sq ft. Stenprop was represented by CPP for the acquisitions of Hillfoot and Armthorpe and by Collingwood Rigby for the acquisition of Trident.
The 10 units at Parkway Business Centre, of which two are vacant, were acquired from M7 Real Estate for £2.1 million, reflecting a net initial yield of 7.0%. They total 31,572 sq ft and produce annual passing rent of £129,780, which equates to an average rent of £4.90/sq ft. Stenprop was represented by Legat Owen.
The eight fully-let units at Forth Industrial Estate were acquired from Granton Holdings for £4.2 million, reflecting a net initial yield of 6.6%. They total 39,922 sq ft and produce annual passing rent of £294,700, which equates to an average rent of £7.40/sq ft. Stenprop was represented by Lewis Ellis. The single unit at Holbrook Enterprise Park, where the wider estate was purchased as part of the Pegasus Portfolio transaction in December 2018, was acquired for £201,500, reflecting a net initial yield of 7.65%.
Legal due diligence was undertaken by Pinsent Masons for the acquisition of Forth Industrial Estate and by Gowling WLG for the acquisitions in England & Wales. Julian Carey, Stenprop’s Executive Property Director, said:
“These properties are all purpose-built multi-let industrial, which meet our acquisition criteria in terms of location and returns. We look forward to rolling out our Industrials operating platform on these estates. We have a number of other similar acquisitions under review, which we hope to
complete in the coming months”.
Stenprop’s strategic objective is to deliver sustainable, growing income to shareholders which is best achieved by becoming a specialised UK multi-let industrial (MLI) property company. This strategic repositioning means that Stenprop intends, over the next few years, to sell all of its non-MLI assets and utilise the sale proceeds to build a focused UK MLI business.
Following these latest acquisitions, MLI assets account for 43.9% of Stenprop’s portfolio. MLI assets are expected to comprise approximately 60% of Stenprop’s total portfolio of properties by 31 March 2020.