Industrials REIT has acquired three multi-let estates in Birkenhead, Coatbridge, and Stockton on Trees in separate transactions for £18 million, reflecting a blended net initial yield of 7.1% and a capital value of £69 per square foot.
The 167 735 sq. ft. Junction 1 Business Park, in Birkenhead, has been acquired from a listed property company for £10.8 million, reflecting a net initial yield of 7.1% and a capital value of £64 per square foot. A dominant commercial centre in The Wirral, the 26-unit estate is 100% let and it generates a total annual passing rent of £822 151, equating to a low average rent of £4.90 per sq. ft. The asset has witnessed both high levels of demand and take up in a region that experiences a shortage of multi-let stock.
Arkgrove Industrial Estate (Stockton on Trees) has been acquired from a private seller for £4.2 million, reflecting a net initial yield of 6.5% and a capital value of £78 per sq. ft. Located immediately next to the north of the A1046 Portrack Lane, in the heart of the Teesside region’s prime industrial and retail warehouse hub, it comprises of a terrace of 14 recently refurbished units with a standalone trade counter unit as well as a secure yard, totalling 54 177 sq. ft. The 100% let estate generates an annual passing rent of £291 712, equating to an average passing rent of £5.38 per sq. ft.
Dundyvan Industrial Estate in Coatbridge was acquired from a property company for £3 million, reflecting a net initial yield of 7.8% and a capital value of £75 per sq. ft. The purpose-built multi-let estate totals 40 067 sq. ft. across 29 units ranging from 600 – 3 900 sq. ft. The asset is currently 98% let, occupying a strategic location southwest of Coatbridge Town Centre, adjacent to both the M74 and M8 motorways and just 8.5 miles from Glashow’s city centre. The estate generates a total annual passing rent of £246 680, equating to an average rent of £6.30 per sq. ft. The company already owns five other multi-let estates in Glasgow which benefit from strong local dynamics with vacancy rates below 4% and strong rental growth.
Industrials REIT’s multi-let industrial portfolio now accounts for 92% of its total assets. The REIT has now acquired 10 estates for £55 million since the 1st of April 2021.
“These off-market acquisitions, which offer a mix of strong day one income and the opportunity to drive rents through our Industrials Hive operating platform, maintain the progress we have made this financial year delivering on our 100% multi-let industrial goal. All three properties offer low passing rents and attractive pricing on a per sq. ft. basis. With replacement costs remaining significantly below development costs and a structural shift in demand driven by growth in e-commerce, we are continuing to see an imbalance between demand and supply which is driving rental growth across our portfolio”, commented Will Lutton, Head of Investment at Industrials REIT.
The acquisition forms part of the company’s target of becoming a fully focused multi-let industrial REIT by March 2022.