UK industrial and logistics REIT Urban Logistics has announced three acquisitions for a total consideration of £36.8 million in Colchester, Exeter and Nottingham and the signing of a new loan facility.
Urban Logistics has entered into a new £151 million loan facility with Barclays, Santander and Lloyds, to replace the existing loan facility totalling £76 million, which was due to expire in 2022. This new facility provides a three-year term and includes an option to extend for a further two-years.
The additional funds available to the company will be used for future asset purchases, said in the statement.
On 10 July 2020, the company acquired Interchange Park, located on the A12 / A120 in Essex, for £9.8 million. This well-located logistics park comprises five units with an average passing rent of £2.49 per sq ft.
The Company has entered into a commitment to acquire a 6-acre development site at Exeter Gateway near junction 29 of the M5 motorway. At completion the development will be pre-let to Amazon and is an expansion to the tenant’s existing parcel distribution facility. Urban Logistics will fund the project to a total cost of £8.5 million with practical completion of the development expected in October 2020.
The Company has also acquired an adjoining site, also of 6 acres, which is conditionally pre-let to DHL and will be its local parcel sorting centre with a low site cover and dual service yards. This £11.2 million development site is due for practical completion by February 2022. It is envisaged DHL will sign a 15-year lease with five-yearly upward only rent reviews.
On 6 August 2020, the Company acquired a high-quality modern 75,059 sq ft warehouse for £7.3 million from M&G Real Estate at 5.6% NIY. The unit is let to Health Stores, a distributor of natural and organic produce, at £5.85 per sq ft through to 2026 and has an outstanding upward only rent review. It serves as a regional distribution hub and is prominently located close to the M1 motorway.
‘Logistics real estate has continued to perform well as the structural shift towards e-commerce accelerates, reaching a new high of 31% of all retail sales in April.’
“Logistics real estate has continued to perform well as the structural shift towards e-commerce accelerates, reaching a new high of 31% of all retail sales in April. The pandemic has also demonstrated a requirement for more buffer in global supply chains, a positive sign for warehouse demand,” said Richard Moffitt, Chief Executive.
“The acquisitions we have announced today were sourced off-market and are firmly in line with our investment strategy of focusing on logistics properties adjacent to urban areas that warehouse essential goods and consumer staples. We have now invested all the proceeds from our March capital raise and the new loan facility enables us to continue to acquire assets in our growing high-quality pipeline in accordance with our strategy in the coming months.”