Warehouse REIT has completed the acquisition of Cambridge South Industrial Estate for £20.15m, reflecting a net initial yield of 4.15%.
The scheme, which comprises 68,000 sq ft across 13 newly built multi-let industrial units and an adjacent development site, is located on the wider Dales Manor Business Park, just seven miles south of Cambridge city centre, six miles north of Chesterford Research Park and within four miles of both the Wellcome Genome Park and Granta Park.
The property offers day one income and longer-term opportunity to add value through development. The Cambridge region is one of the UK’s fastest growing employment and innovation centres, and the industrial market is characterised by supply of just 3.7% and record prime rents.
The scheme is 83% let, with a further 5% under offer, to a diverse range of tenants spanning the packaging, food distribution, storage, wine wholesale and research sectors. The property currently generates £672,000 of contracted rent per annum, including a guarantee on the last three vacant units, which equates to a low passing rent of £9.89 per square foot and has a weighted average unexpired lease terms (WAULT) of over 8 years.
The development land comprises 3.4 acres with planning permission secured for an additional 14-unit multi-let scheme totalling 73,000 sq ft. Warehouse REIT intends to undertake a phased development approach against partial pre-lets.
Andrew Bird, investment manager, said: “This is a rare opportunity to acquire a modern, multi-let warehouse estate in one of the UK’s fastest growing business and employment hubs, with additional development land allowing the company to pursue ongoing discussions with potential users, with a view to securing pre-lets that will deliver enhanced returns over and above the built stock. Leveraging the strength of our counterparty relationships, this acquisition followed a very limited and selective marketing campaign and fits well with Warehouse REIT’s strategy of acquiring a mix of strong existing income, near term lease events allowing the company to capture the reversion as well as longer term development and asset management opportunities.”
WHR : Warehouse REIT buys Cambridge industrial estate for £20m