Logistics property firm Urban Logistics REIT plc has bought four warehouses for £28.6m, at a 5.82% average net initial yield (NIY). The value-accretive assets include three immediately income-producing properties and the forward-funding of a development project in Sheffield, which will be fitted with electric vehicle chargepoints
The UK warehouse specialist recently raised £250m in capital and moved to the Main Market of the London Stock Exchange on 7 December 2021.
Says Richard Moffitt, Chief Executive: “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.
“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.”
The acquisitions are:
Elland Road, Leicester :A distribution depot off the M1 motorway, near Leicester. The 27,115 sq. ft. site is a parcel delivery hub let to the Royal Mail Group. The purchase price paid was £3,180,000 at a NIY of 5.0%.
Caswell Road, Northampton: A 22,783 sq. ft. warehouse at in Northampton with very low site density. The unit is let to Tuffnells Parcel Express, a tenant well known to the Company, until 2031. The purchase price paid was £5,600,000 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 £6,000,000 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 building is designed to have excellent environmental credentials, with a BREAM Excellent rating, an EPC of A, and electric vehicle charging points. The project is targeting a 6.0% NIY on cost.