Droitwich and Rugby warehouses sold to Warehouse REIT

Stonebridge Park Droitwich

Warehouse REIT, the AIM-listed company that invests in e-commerce urban and last-mile industrial warehouse assets in the UK, has bought a portfolio of four single and multi-let distribution warehouse assets for a total of £18.6 million. The purchase price reflects a blended net initial yield of 6.1%.

Located in key strategic last mile distribution hubs within the North West and the West Midlands, the 200,000 sq ft portfolio is 100 per cent occupied on leases producing a total rent of £1.22 million per annum with an average rent £6.10 psf, which is both reversionary and offers good potential for rental growth.  Whilst the portfolio already has a WAULT of circa five years, there is also good potential to increase the longevity of the income in the short term.  The two assets in this region include:

Stonebridge Cross, Droitwich Spa, which comprises two modern detached industrial units totalling 48,000 sq ft within the 77-acre Stonebridge Cross Business Park. The asset is let to two service companies taking advantage of its close proximity to employment and ease of access to the national motorway distribution network.

Valley Point, Rugby, a 39,000 sq ft unit on Swift Valley Park.

The other two assets are based in Warrington.

Andrew Bird, Managing Director of the Investment Advisor, Tilstone Partners Limited, said: “We are pleased with this latest addition to the Company’s portfolio, which represents an increasingly rare opportunity to acquire a strategic portfolio of assets, in tactical last mile distribution locations, capable of serving the growing e-commerce demand benefitting from ease of access to major UK conurbations in the North West and West Midlands regions. Furthermore, a number of lease events offer the opportunity to increase the longevity and quality of income over the short and medium term.

“Having invested the equity from July’s capital raise, we remain focused on advising Warehouse REIT in deploying the remaining associated debt in order to further improve the portfolio metrics and continue to generate shareholder value.”