UK multi-let industrial property company Stenprop has purchased three multi-let industrial estates in Newcastle, Bromborough and Bradford in separate transactions for a total consideration of £18.4 million, reflecting a net initial yield of 6.7% and a capital value of £99 per sq ft.
Located three miles from Newcastle City Centre, Stenprop has acquired Riverside Industrial Estate for £10.9 million from Aegon. Comprising 14 units across four terraces and two detached units, the property is let to a diverse occupier base spanning distribution, construction and trade counter uses. It currently generates a total annual passing rent of £784,660, equating to a low average rent of £6.40 per sq ft on occupied units. There are two vacant units which are already generating strong interest from potential occupiers.
Lake Enterprise Centre in Bromborough has been acquired in an off-market transaction for £4.15 million. The estate, which is 94% occupied and generates a passing rent of £296,000 per annum, is strategically located immediately adjacent to an existing holding, in a market characterised by a strong level of demand offering scope for future rental growth.
In a third, off-market, transaction, Stenprop has acquired Enterprise 5 in Bradford for £3.37 million. Comprising 17 units, the estate is currently fully-let with a passing rent of £234,000 per annum. The well-located property has a strong letting history and its location in a densely populated urban area is expected to underpin continued high levels of occupancy and generate strong future rental growth.
”With these acquisitions, and following the completion of Stenprop’s German retail centre asset sales, which have already exchanged and are expected to complete soon, Stenprop’s MLI portfolio will account for 73% of total assets, as it remains on track to be 100% MLI by the end of the next financial year,” said in a statement.
“We have started 2021 where we ended last year, defying the macro economic uncertainty and lockdown restrictions to grow the MLI portfolio through identifying and executing upon on and off market acquisitions and adding well let properties in supply constrained locations where there is an opportunity to increase rents. Both the near and long-term drivers underpinning investment in the sector remain compelling, with strong rental growth and acquisition below replacement cost values. Our local management teams are looking forward to working with the new customers and to rolling out our industrials.co.uk operating platform across these estates,” said Will Lutton, Head of Investment at Stenprop.