Warehouse REIT has recently concluded the sale of two distribution estates totalling 269,000 per sq ft, for £29.5m, generating an ungeared IRR of 9%.
The disposals comprise:
- 12 Exeter Way, Theale, a vacant 92,000 sq ft warehouse with a high office component, acquired by an owner occupier for £15.0m; and
- Temple House, Harlow, for £14.5m, which has been sold ahead of a potential vacancy and capital expenditure costs, following the receipt of notice to break from the main tenant in March 2023.
These disposals, in addition to the £13.9m of sales announced at the half year results on 8 November 2022, have been augmented by another £11.3m of smaller asset sales, taking total H2 disposals to £54.7m.
Asset Management
Additionally, reflecting the robustness of the UK occupational market, the company has reduced portfolio vacancy through active asset management initiatives and disposals, increasing the portfolio occupancy to 95.9% (as at 28 February 2023), from 92.7% (as at 7 November 2022).
Significant transactions include Midpoint 18, where the company has exchanged on a new 10-year lease with a 5 year break, on previously vacant commercial space, to Inhealth Intelligence, a leading software provider of information management solutions for the UK healthcare sector, generating rent of £0.2m per annum. Midpoint 18 is strategically located near the M6 motorway in Cheshire and totals about 600,000 sq ft of multi and single tenant space.
Separately, the company has also completed the construction, for £3.9m, of an open storage scheme on surplus land at Midpoint 18. Brit European, an international specialist logistics occupier, has agreed a 15 year lease for the purpose built facility, generating £0.3m per annum of rent. Brit European is being relocated from the Company’s nearby Radway Green Estate, facilitating vacant possession and advancing the wider redevelopment.
WHR : Disposals and new rentals bolster the attractions of Warehouse REIT