Stenprop has acquired three multi-let industrial (MLI) estates for £18.4m as it remains on target to be a fully focused MLI REIT by the end of the next financial year.
The three in Newcastle, Bromborough and Bradford, have been purchased in separate transactions at a net initial yield of 6.7% and a capital value of £99 per sq ft.
With these acquisitions, and following the completion of Stenprop’s German retail centre asset sales, which have already exchanged and are expected to complete soon, Stenprop’s MLI portfolio will account for 73% of total assets.
Located three miles from Newcastle City Centre, Stenprop has acquired Riverside Industrial Estate for £10.9m from Aegon. Comprising 14 units, the property is let to a diverse occupier base spanning distribution, construction and trade counter uses. It currently generates a total annual passing rent of £784,660, equating to an average rent of £6.40 per sq ft on occupied units. There are two vacant units.
Lake Enterprise Centre in Bromborough has been acquired in an off-market transaction for £4.15m. The estate, which is 94% occupied and generates a passing rent of £296,000 per annum, is located immediately adjacent to an existing holding, in a market that Stenprop said offers scope for future rental growth.
The third transaction, also conducted off-market, was Enterprise 5 in Bradford for £3.37m. Comprising 17 units, the estate is currently fully-let with a passing rent of £234,000 per annum. It is located in a densely populated urban area, which is expected to underpin continued high levels of occupancy and generate strong future rental growth.
Will Lutton, head of investment at Stenprop, said: “We have started 2021 where we ended last year, defying the macro economic uncertainty and lockdown restrictions to grow the MLI portfolio through identifying and executing upon on and off market acquisitions and adding well let properties in supply constrained locations where there is an opportunity to increase rents. Both the near and long-term drivers underpinning investment in the sector remain compelling, with strong rental growth and acquisition below replacement cost values.”
STP : Stenprop acquires trio of industrial estates