Schroder Real Estate Investment Trust has completed the acquisition of Stanley Green Trading Estate together with an adjoining development site in Cheadle, South Manchester, for a total of £17.25 million, reflecting a blended net initial yield of 5.2%.
The freehold Estate and Site are located in a prime South Manchester location at the junction of the A34 and the A555, which is the recently completed upgrade Manchester Airport Eastern Link Road (Ringway Road).
The Estate comprises approximately 150,000 sq ft of warehouse accommodation across 14 units on a nine acre site and is fully let to thirteen tenants generating a total contracted rent of £960,000 per annum or an average rent of £6.55 per sq ft. The estimated market rental value (‘ERV’) is approximately £1.25 million per annum. The average unexpired lease term, assuming all tenant breaks are exercised, is three years. 97% of the rent due during the Covid-19 pandemic has been collected. The apportioned price for the Estate of £14.4 million reflects a net initial yield of 6.3% and a reversionary yield, based on the ERV, of 7.1%.
The Site comprises a 3.4 acre, regular shaped and serviced plot which is currently non-income producing. The apportioned site price is £2.85 million. The Site has a historic planning consent for 48,000 sq ft of trade counter and warehouse space and is allocated for industrial development in the local development plan.
”As with other industrial assets owned by the Company such as Stacey Bushes Industrial Estate in Milton Keynes, the strategy is to obtain an improved planning consent and develop a high quality trade centre and warehouse units during 2021,” said the company in a statement.
”Combined with the previously announced acquisition of Langley Park in Chippenham, due to complete today, the properties deliver income of £2.7 million per annum, equating to an average net initial yield of 6.8%.”
The acquisitions increase SREIT’s industrial weighting from 30% to 36%, with the majority of this by value in high quality, multi-let estates.