UK-focused REIT Schroder Real Estate Investment Trust has agreed to acquire an industrial estate in Chippenham for £19.25 million, reflecting a net initial yield of 8.2%.
Langley Park is located in Chippenham town centre close to the railway station and four miles south of junction 17 of the M4 motorway. It is in close proximity to the cities of Bristol and Bath and serves both metropolitan areas.
The industrial estate in Chippenham comprises approximately 400,000 sq ft of warehouse and ancillary office accommodation on a 28 acre site, equating to a low site cover of approximately 30%. Langley Park is let to five tenants producing a total net rent of £1.68 million per annum or an average rent of £4.21 per sq ft. 100% of the rent due during the Covid-19 pandemic has been collected. The estimated market rental value is approximately £1.8 million per annum. The average unexpired lease term, assuming all tenant breaks are exercised, is four years.
The largest tenant is Siemens Mobility Limited, representing 53% of the rental income, who employ approximately 800 people at the site. Siemens pay a net rent of £965,000 per annum with a lease expiry in June 2026. Other tenants include a UK subsidiary of Littlefuse Inc., a global manufacturer of power systems for the transport industry (20% of rental income), Schneider Electric Limited (11% of rental income) and NHS Property Services Limited (8% of rental income).
The acquisition increases SREIT’s industrial weighting from 30% to 33%, with the majority of this by value in high quality, multi-let estates.