Warehouse REIT, the AIM-listed specialist warehouse investor, has exchanged contracts to acquire a 53,000 sq ft single-let industrial unit in Wakefield for £4.2 million, reflecting a net initial yield of 6.3%.
It follows the announcement on Friday 29 March 2019 that the Company had raised £76.48 million of equity, which along with leverage, provides it with over £120 million of investment firepower to deploy into a near term pipeline of opportunities, as it looks to benefit from the favorable investment backdrop for the single-let and multi-let warehouse sector.
The 11 metre eaves unit set within Wakefield 41 industrial estate, was acquired via a sale and leaseback to Stapleton’s Tyre Services Limited, one of the UK’s largest distributors of passenger car and 4x4 and van tyres. The tenant has agreed a new 15 year lease, generating £281,000 per annum which equates to £5.25 psf, with rent reviews and tenant only break options at years 5 and 10. The warehouse serves as its key northern distribution hub, serving over 1,000 garages and stores in Yorkshire and Lincolnshire.
Wakefield 41 is Yorkshire’s premier distribution location which is home to Coca Cola, Morrisons and Menzies amongst a number of other national and international businesses. Adjacent to Junction 41 of the M1 and 2.5 miles south of the M1/M62 interchange, the warehouse benefits from excellent motorway connectivity.
Andrew Bird of Tilstone commented: “We have a strong track record of identifying and adding well-located, well-let assets to the portfolio, acquired at attractive yields, which demonstrates both the strength of our UK wide origination teams as well as the robust demand from occupiers for good quality logistics space in and around strong performing regional conurbations. The Stapleton’s unit in Wakefield satisfies a long-standing requirement to bolster our holding on the M62, which is increasingly becoming an important location for ecommerce and traditional logistics operators. We look forward to further developing our relationship with the occupier being a key part of our asset management offer.
“Following the successful share issue announced on Friday, which provides us with over £120 million to deploy, it is pleasing to be able to immediately deliver on this acquisition, whilst the substantial remaining capital means we are now in a position to accelerate delivery of our near term pipeline and significantly scale the portfolio.”