Hansteen Holdings, an industrial property REIT that invests in properties across the UK, has purchased a portfolio of seven multi‐let, urban industrial estates on Newton Aycliffe Industrial Estate in County Durham, from M&G.
The purchase price of £12.0 million reflects a high net initial yield of 8.5% and a low capital value of £38 psf.
The portfolio comprises 53 units totalling 341,620 sq ft, with individual units ranging in size from 820 sq ft to 32,648 sq ft. The contracted rental income is £1,094,000 per annum (£3.55 psf) with a total current ERV of £1,272,000 per annum (£3.72 psf).
The units are let to 40 tenants, which are a mix of local, regional and national companies, on 45 leases providing a diverse and robust income stream. 32,942 sq ft (9.42%) of the space is currently vacant, providing an immediate opportunity to enhance income through letting the vacant units.
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The properties are within the wider Aycliffe Business Park, the second largest industrial park in the north east, comprising around 980 acres, 500 businesses and employing more than 10,000 people. The park is the biggest single employment area in County Durham and forms a key part of the north east economy.
“This purchase fits our acquisition criteria perfectly, being significantly below replacement cost, with low rents capable of further growth, vacant units and in an area where we have significant holdings and a regional team that can add real value,” said Derek Heathwood, UK Property Director at Hansteen.