Urban Logistics secures three properties and a loan – Urban Logistics has made three purchases for a total of £36.8m and secured a new £151m loan facility.
Colchester
On 10 July 2020, Urban Logistics bought Interchange Park, on the A12 / A120 in Essex, for £9.8m. The logistics park has five units with an average passing rent of £2.49 per sq ft. They says that local logistics rents are now achieving pricing levels of £7.00 per sq ft. Commencing later this year, the existing units will undergo an extensive £2.0 million refurbishment to create a modern, prime distribution centre serving the south east. The site benefits from a new road junction and infrastructure improvements which include a 10,000-unit housing development nearby. The acquisition includes an additional 7 acres of land to the north east of Interchange Park which, subject to planning, will be allocated to the development of a further three units.
Exeter
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 £8.5m 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 £11.2m development site is due for practical completion by February 2022. It is envisaged that DHL will sign a 15-year lease with five-yearly upward only rent reviews.
This opportunity came about as a result of the developer losing a Local Authority funding partner due to Covid-19. [that’s interesting – we wonder if it became logistically difficult – if you’ll pardon the pun – to get the partner on board or whether the local authority was cash constrained as a consequence of dealing with COVID. If the latter, that could have wider implications for parts of the market that have been dominated by local authority purchasers.] The forward funding represents a discounted entry point at a 5.3% net initial yield in a location known for its constrained supply of logistics facilities. It will create a prime urban logistics park with the potential to own further warehouses developed on the remaining adjacent land.
Nottingham
On 6 August 2020, the company bought a high-quality modern 75,059 sq ft warehouse for £7.3m from M&G Real Estate at 5.6% net initial yield. 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.
New Loan Facility
On 7 August 2020, the company entered into a new £151m loan facility with Barclays, Santander and Lloyds, to replace the existing loan facility totalling £76m, 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 money will be used to buy more assets.
SHED : Urban Logistics secures three properties and a loan