UK Commercial Property REIT has continued to strengthen its industrial and logistics portfolio with the £94m acquisition of Precision Park in Leamington Spa, Warwick, which includes a government-let ‘Megalabs’, aimed at increasing the UK’s daily testing capacity for COVID-19.
Precision Park comprises two distribution units extending to over 380,000 sq ft, a 65,442 sq ft office and development land spanning 3.72 acres, which will be speculatively developed to deliver a 67,700 sq ft industrial asset.
The existing distribution units are currently let to two tenants: IT service management company, Iron Mountain Ltd; and The Secretary of State for the Department of Health & Social Care. The latter is situated in a unit dedicated to being one of the two UK ‘Megalabs’, aimed at increasing the UK’s daily testing capacity for COVID-19. The unit itself is set to help create up to 4,000 jobs and forms a key part of the UK’s national infrastructure response to future epidemics as well as adding diagnostic capacity for other critical illnesses.
The office accommodation is also let to two technology-focused tenants, including Tata Consultancy Services and a global social networking provider.
This purchase takes the company’s total committed investment for the year to almost £233m, while industrial and logistics now represents 63% of the company’s portfolio.
With the purchase, the board confirmed that it expects to be in a position to announce an increase in the dividend in relation to the fourth quarter of 2021.
Kerri Hunter, interim lead manager, said: “The property is well located and well let to very strong covenants in good quality buildings, with a life sciences/tech angle. Its purchase is an excellent fit to fund strategy as it is a multi-faceted investment, encompassing all aspects of what we’re trying to achieve – it not only offers solid income streams but also the opportunity to drive superior performance through asset management and development. The low risk nature of the existing portfolio enables us to take on more development, thereby creating more high quality assets at a significant discount to purchasing up and let stock.
“It is part of a strong pipeline of additional interesting assets UKCM is looking to invest in and builds on the company’s strong portfolio of recent acquisitions, which includes the income-accretive medium term industrial development site in West London and the forward funding of Sussex Junction.”
UKCM : UK Commercial Property REIT acquires COVID lab in £94m deal