Warehouse REIT buys Widnes Amazon warehouse – Warehouse REIT has exchanged contracts for the acquisition of a warehouse in Widnes, Cheshire for£2.765m, reflecting a net initial yield of 7.3%. The asset is fully let to Amazon UK Services Ltd on a newly agreed five-year lease to serve the online retailer’s last mile distribution requirements across the surrounding North West region. Amazon is now the second largest tenant on the company’s rent roll.
The modern warehouse facility offers 48,932 sq ft of high specification newly-refurbished space which includes two storey office accommodation and an electrically operated loading bay, all set within a self-contained 2.5 acre site. The asset is currently generating a comparatively discounted rental income of £216,432 per annum (£4.42 per sq ft), which they say offers attractive growth prospects, while its low capital value of £56 per sq ft is less than the cost of replacement.
The warehouse is located in the heart of the North West in a prominent location on the established Halebank Industrial Estate in Widnes, Cheshire, benefitting from excellent motorway access. Widnes is approximately 14 minutes’ drive time from Liverpool Airport, 30 minutes from both the Port of Liverpool and Manchester Airport, and only 20 minutes from the M62/M6 interchange, offering good infrastructure provision for a logistics company. The asset’s tenant is leveraging its strong location by using the facility to service the distribution of small items being offered for sale by “Amazon Sellers”.
Andrew Bird, Managing Director of Tilstone Partners Ltd, the manager of Warehouse REIT, commented: “This transaction is in line with Warehouse REIT’s strategic focus, being located in an established commercial location, close to urban centres and well connected by strong local transport infrastructure – exactly what ecommerce businesses are looking for from a warehouse facility, whilst also enabling us to benefit from the yield arbitrage following recent disposals of lower yielding assets. The North West industrial market continues to see record levels of both investor and tenant demand, driven by strong occupational dynamics, a shortage of new development and the continued regional growth of the online retail market.”
[QD comment: the yield on this seems quite high for as good a tenant as Amazon.]
WHR : Warehouse REIT buys Widnes Amazon warehouse