Urban Logistics REIT (SHED) has announced the acquisition of six logistics assets for a total consideration of £27.8 million at a net initial yield of 6.87%. The acquisitions include the Kinaxia portfolio (four logistics assets purchased from Kinaxia Logistics), a logistics asset in Leigh and a logistics asset in Rotherham.
The Kinaxia Portfolio
On 17 February 2021, the company acquired a portfolio of four logistics assets from Kinaxia Logistics for £17.3 million at a net initial yield of 6.24%. This sale and leaseback transaction includes sites in Macclesfield, Telford, Royal Wootton Bassett and Yate. Totalling 167,350 sq ft of warehousing, the average rent is £5.24 per sq ft. The tenant provides haulage and logistics services to clients across the UK. The new leases are for 15-year terms with a tenant break option after 10 years. There are five yearly rent reviews to the higher of RPI (2 – 4% cap and collar) and open market value.
The Leigh asset
On 12 February 2021, the company acquired a 80,209 sq ft distribution unit for £6.7 million at a net initial yield of 6.25%. This is a sale and leaseback transaction with XPO and the site is let for a term of five years. The rent is £5.50 per sq ft. The site is close to the A580 / M6 in a location well known to the Manager.
Rotherham
On 10 February 2021, the Company acquired a well-specified 124,966 sq ft distribution unit for £3.8 million from Goodman at a net initial yield of 10.8%. The site is let to Green Forest Solutions for a term of five years through to 2025. The rent is £3.50 per sq ft. The site is located close to the M18, M1 and A1(M).
Comments from Richard Moffitt, Urban Logistics REIT’s chief executive
“We are delighted with these new logistics assets which are perfectly positioned to deliver essential goods the “last mile” to customers and businesses in key conurbations.
“In line with our strategic focus, all of these assets are single-let properties servicing high quality logistics tenants.”
[QD comment: This latest tranche of deals fits with Urban Logistics REIT’s modus operandi of acquiring well located assets that are mission critical for the tenant (as in the case of Kinaxia and Leigh assets) or come with some value-add opportunities (Rotherham). We believe the group has now fully invested proceeds from its equity raise last year (plus available debt). The company is growing quickly in the burgeoning logistics sector and another raise could be on the cards in the not too distant future.]