Warehouse REIT has acquired Cambridge South Industrial Estate, located on the wider Dales Manor Business Park, just seven miles south of Cambridge city centre, for £20.15 million.
The purchase price reflects a net initial yield of 4.15% on the apportioned price for the completed buildings, said the company in a statement.
The Cambridge property comprises 68,000 sq ft of newly built multi-let industrial units and an adjacent development site.
Totalling 68,000 sq ft across 13 multi-let industrial units, phase one of the estate was recently completed to a very high specification with EPC ratings of ‘A’ through to ‘B’ and features including a renewable energy source on site. It is 83% let, with a further 5% under offer, to a diverse range of tenants spanning the packaging, food distribution, storage, wine wholesale and research sectors, with strong interest in the other three vacant units.
The property currently generates £672,000 of contracted rent per annum, including a guarantee on the last three vacant units, which equates to a low passing rent of £9.89 psf and has a weighted average unexpired lease terms of over 8 years.
Situated directly adjacent to phase one, phase two comprises a 3.4 acre development site with planning permission secured for an additional 14-unit multi-let scheme totalling 73,000 sq ft. Warehouse REIT intends to undertake a phased development approach against partial pre-lets.
“This is a rare opportunity to acquire a modern, multi-let warehouse estate in one of the UK’s fastest growing business and employment hubs, with additional development land allowing the company to pursue ongoing discussions with potential users, with a view to securing pre-lets that will deliver enhanced returns over and above the built stock. Leveraging the strength of our counterparty relationships, this acquisition followed a very limited and selective marketing campaign and fits well with Warehouse REIT’s strategy of acquiring a mix of strong existing income, near term lease events allowing the Company to capture the reversion as well as longer term development and asset management opportunities,” said Andrew Bird, Managing Director of the Investment Advisor, Tilstone Partners Limited.