UK multi-let industrial property company, Stenprop, has acquired three multi-let estates totalling £18.4 million as it continues its industrial transition.
The three acquisitions in Newcastle, Bromborough and Bradford have been purchased in separate transactions which reflect a net initial yield of 6.7% and a capital value of £99 per square foot, bringing the company’s total number of multi-let acquisitions since September 2020 to eight for an aggregate value of £44.2 million.
Located three miles from Newcastle City Centre, Stenprop has acquired Riverside Industrial Estate for £10.9 million from Aegon which comprises of fourteen units across four terraces and two detached units. The property is let to a diverse occupier base spanning distribution, construction, and trade counter uses and it currently generates a total annual passing rent of £784 600 which equates to a low average rent of £6.40 per square foot on occupied units. There are two vacant units which are generating strong interest from potential occupiers. This acquisition grows Stenprop’s portfolio in the North East, a market characterised by record take up in 2020 which has resulted in constrained supply following the acquisition of Mandale Business Park in Durham in November 2020 for £11.2 million.
Lake Enterprise Centre in Bromborough has been acquired in an off-market transaction for £4.15 million and the estate, which is 94% occupied and generates a passing rent of £296 000 per annum, is strategically located adjacent to an existing holding in a market characterised by a strong level of demand which offers scope for future rental growth.
The third, off-market transaction was the acquisition of Enterprise 5 in Bradford for £3.37 million which comprises of seventeen units. The estate is fully let with a passing rent of £234 000 per annum with a strong letting history. It is in a densely populated urban area and it is expected to underpin continued high levels of occupancy, generating strong rental growth.
With these acquisitions and following the completion of Stenprop’s German retail centre asset sales, which have already exchanged and are expected to be completed soon, the company’s multi-let industrial portfolio will account for 73% of total assets as it remains on track to be 100% multi-let industrial by the end of the next financial year.
“We have started 2021 where we ended last year, defying the macro economic uncertainty and lockdown restrictions to grow the multi-let industrial portfolio through identifying and executing upon on and off market acquisitions and adding well let properties in supply constrained locations where there is an opportunity to increase rents” commented Will Lutton, Head of Investment at Stenprop.
“Both the near and long-term drivers underpinning investment in the sector remain compelling, with strong rental growth and acquisition below replacement cost values. Our local management teams are looking forward to working with the new customers and to rolling out our industrials.co.uk operating platform across these estates.”