AEW UK REIT plc has acquired a multi-let industrial estate, Westlands Distribution Park in Weston Super Mare for £5.4 million, reflecting a low capital value of £175,000 per acre and a net initial yield of 6.4%.
The company said the estate is expected to increase to at least 7.4% within the medium term. The average passing rent of £1.50 per sq ft also provides strong potential for rental growth.
The established 323,437 sq ft estate is let to 15 tenants including North Somerset District Council who make up 30% of the income stream. The industrial estate in Weston is located 3 miles from the M5 Motorway and 20 miles south of Bristol city centre.
“Following the very profitable sale of our largest asset in Corby during May, we have undertaken cautious analysis of the investment market and our pipeline in the intervening months when looking to replace Corby and its income stream within the portfolio. This latest acquisition is an excellent fit for the portfolio as it offers significant potential for future value accretion in addition to its very low level of passing rent which provides strong prospects for future rental growth,” commented Alex Short and Laura Elkin, Portfolio Managers, AEW UK REIT.