Warehouse REIT buys Glasgow air cargo centre – Warehouse REIT has exchanged contracts on the purchase of the Air Cargo Centre at Glasgow International Airport, from Airport Industrial Nominees Limited. The GBP11.1 million price represents a net initial yield of 6.7% and a reversionary yield in excess of 7%. The property is held by way of a ground lease from Glasgow Airport Ltd, which expires in 2148.
Located landside, immediately adjacent to the Airport but only eight miles from Glasgow City Centre, the 150,000 sq ft estate is arranged across two detached warehouses purpose-built in 2000, housing eight units let to five separate occupiers, with a WAULT of 6.3 years (4.1 years to first break). It generates a total net passing rent of GBP788,086 a year, equating to less than GBP5.50 per square foot (psf) average rent.
Current occupiers include Nippon Express (UK) Ltd, PJH Group Ltd and Alpha LSG Ltd; the tenant base which includes companies servicing both direct airport activities as well as the wider logistics distribution market. Some of the units are let on rents as low as GBP5.06 psf, which provides significant near term opportunities to drive rental growth given the competition amongst occupiers for space and recent lettings in the immediate vicinity in the region of GBP7.00 psf.
In 2018 Glasgow Airport catered for 9.7 million passengers, supporting over 30,000 jobs across Scotland and generating in excess of GBP1.44 billion annually for the economy. With some 30 airlines serving over 100 destinations worldwide, Glasgow is Scotland’s principal long-haul airport and Scotland’s largest charter hub, whilst it also handles circa 13,000 tonnes of freight a year.
Andrew Bird of Tilstone commented: “The Air Cargo Centre in Glasgow is an exciting acquisition, highlighting our focus on buying well located warehouses close to important infrastructure hubs. There remains a constrained supply of airport related warehouses and yet the purchase continues to represent an investment value less than the cost of replacement. It is the belief of Tilstone that assets such as the Air Cargo Centre represent scarce commodities where rental growth will out-perform the wider market indices.
It is interesting to note that 97% of Warehouse REIT’s assets are less than two miles from a town centre or major transport infrastructure point, characterised as being a main road, railway station port or airport, with the average distance being less than 1 mile, proving both the urban and logistics nature of our assets.”
WHR : Warehouse REIT buys Glasgow air cargo centre
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