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Urban Logistics REIT purchases four assets

Urban Logistics REIT has bought four assets for £28.6m, as it begins to deploy the proceeds from its recent £250m equity raise.

The acquisition price reflects an average net initial yield (NIY) of 5.82%. Three of the assets are income producing, while the fourth is a forward funding development project.

The assets

  • Elland Road, Leicester – A distribution depot off the M1 motorway, near Leicester, totalling 27,115 sq ft, the site is a parcel delivery hub  let to the Royal Mail Group. The purchase price paid was £3.18m at a NIY of 5.0%.
  • Caswell Road, Northampton – a 22,783 sq ft warehouse let to Tuffnells Parcel Express, an existing tenant for Urban Logistics REIT, until 2031. The purchase price paid was £5.6m at a NIY of 5.7%.
  • Riverside Park, Dundee – a warehouse facility of 117,031 sq ft near the airport, in Dundee. The purchase price was £6m at a NIY of 6.0%. The site is occupied by Hermes Parcelnet and presents asset management opportunities to achieve a strong reversionary yield.
  • Newhall Road, Sheffield – the company has entered into an agreement to forward fund the development of a new logistics unit in Sheffield. The agreement is subject to planning, and the development is expected to complete in November 2022, and will comprise a warehouse of 131,500 sq ft. The project is targeting a 6.0% NIY on cost.

Richard Moffitt, chief executive, said: “We’re pleased to confirm our continued deployment of capital following the close of our recent oversubscribed equity raise. This is testament to our team’s ability to act swiftly and reliably on deal execution. As previously stated, we have an excellent pipeline of “last mile / last touch” logistics assets to acquire and the team will be working hard over the coming months, investing in those quality assets that will be accretive to shareholder value, with further acquisitions expected before the end of the year.

“Our strategy of acquiring mid-box last mile logistics assets, in key locations, with excellent transport links has not altered since inception in 2016. We acquire properties which are key to our tenants’ operations, and we continue to create additional performance through active asset management and improved environmental performance.”

SHED : Urban Logistics REIT purchases four assets

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