JSE-listed real estate investment trust (Reit) Industrials REIT has acquired four multi-let industrial estates in Boston, Barnsley, Leeds and Stockton on Tees, in the UK, for £20.86-million.
The purchase price reflects a blended net initial yield (NIY) of 5.7% and an average capital value of £80/ft2. Totalling 260 000 ft2, the newly acquired assets generate £1.25-million of rent a year, which equates to a low average passing rent of £4.82/ft2.
“Following these transactions, Industrials REIT’s multi-let industrial portfolio now comprises 105 estates across 7.1-million square feet of space,” the UK multi-let industrial property company says.
The first of the industrial assets is the Haven Business Centre, in Boston, which was acquired for £4-million, reflecting a NIY of 7.1% and a capital value of £69/ft2. The property is 100% occupied and comprises 58 148 ft2 of multi-let industrial space across 22 units, generating yearly rent of £301 649, which equates to £4.98/ft2.
Haven Business Centre is a modern estate offering purpose-built units of between 1 500 and 13 000 ft2, which are highly sought after by small and medium-sized enterprises in the local market.
Further, Twibell Street Trade Park, in Barnsley, was acquired for £5.85-million, reflecting an NIY of 5.25%. The purpose-built, modern industrial estate totals 54 978 ft2 across five units and is 100% occupied, generating yearly rent of £327 070, which equates to £5.95/ft2.
Meanwhile, Astra Park, in Leeds, was acquired for £6.7-million, reflecting an NIY of 4.8% and a capital value of £93/ft2. It is 100% occupied, offers 72 069 ft2 of multi-let industrial space across 16 units and generates rent of £341 249, equating to low passing rent of £4.74/ft2.
“Astra Park is a highly sought after multi-let industrial hub, strategically located two kilometres south of Leeds City Centre. The local area is characterised by a shortage of available units, which is expected to underpin future rental growth in addition to offering medium- to long-term development opportunities given the low site density,” Industrials REIT says.
Additionally, Units 1-12 in Primrose Hill Industrial Estate, in Stockton on Tees, was acquired for £4.31-million, reflecting a 6.2% NIY and a capital value of £57/ft2. The property totals 75 270 ft2 across 13 units and generates rent of £286 172, equating to £3.80/ft2.
The modern, purpose-built estate is 100% leased to 11 occupiers and benefits from its location in the centre of Stockton-on-Tees, the Reit said.
“These properties, which take our multi-let industrial portfolio past seven-million square feet, are fully aligned with our objective of investing in purpose-built multi-let industrial estates let off low passing rents and located in densely populated areas, which are witnessing strong economic activity,” says Industrials REIT head of investment Will Lutton.
“The regional multi-let industrial market is characterised by record low vacancy and strong tenant demand, demonstrated by the 100% occupancy levels across these assets.
“In addition to a mix of near- and more medium-term asset management opportunities, we are confident of capitalising on current demand to drive rents through our Industrials Hive operating platform,” he adds.