UK-based multi-let industrial (MLI), listed property company Industrials REIT (formerly Stenprop), has acquired Beacon Business Park in Caldicot and three units at Belmont Industrial Estate in Durham for £17.01m. This forms part of its goal of making its portfolio exclusively industrial by March.
The acquisition reflects a blended net initial yield of 5.8%, an average capital value of £98 per square foot.
Multi-let industrial asset are located near urban areas, estates and comprise of different sized units let to multiple occupiers and are usually under single ownership.
Industrials REIT said the acquisition add 173,000 square feet of MLI space, and £1.06m of annualised rent to its portfolio at average passing rents of £6.61 per square foot. Its MLI portfolio now accounts for 95% of total assets.
Industrials REIT, a company with a diversified portfolio is listed on the London Stock Exchange and JSE, giving SA investors an opportunity to invest in UK listed property.
In December, the company moved to the premium board of the LSE, and migrated its shares on the JSE main board to secondary a listing. Its SA shareholding is 20% of total company shares.
“With these acquisitions we have added a new, high-quality multi-let industrial estate to our portfolio as well as consolidating our holding at Belmont Industrial Estate in Durham. We have identified several opportunities to grow income and asset value from these estates by leasing up the existing vacancy using our Industrials Hive operating platform,” said Will Lutton, head of investment at Industrials REIT.
Industrials REIT plans to acquire high-quality assets as part of its goal of making its portfolio exclusively multi-let industrial property by March 31. The company is targeting £100m of multi-let industrial acquisitions this financial year, and with the next trading update expected on Friday, it is optimistic about the year ahead, Julian Carey, Industrials REIT MD told Business Day.
“These latest acquisitions bring the total to £77m this year, and with the company’s current pipeline, we are confident this goal will be achieved,” said Carey.
He said that together with these two acquisitions, the company now owned 97 multi-let industrial assets valued at £508m (based on first half valuation) of which 95% is now multi-let industrial.
“Occupier demand for multi-let industrial space in the UK will continue to grow from a constantly enlarging pool of diverse businesses, empowered by the communications and e-commerce revolution. Supply will continue to be restricted by the lack of availability of land in, and around densely populated cities and towns where these units need to be,” Carey told Business Day.
New assets
Acquired for £7.9m, Beacon Business Park in Caldicot is well located within the broader Severn Bridge Industrial Estate in Caldicott, South Wales. The estate is 97% occupied, and the vendor has provided a six-month guarantee on the vacant unit, which has already generated strong interest.
Additionally, this area has low vacancy rates for industrial space and is experiencing strong growth in demand, particularly for units measuring 1,500-10,000 square feet (about 140m2-930m2).
Belmont Industrial Estate in Durham is strategically located just more than 3km from Durham City Centre. Vacancies are very low, thus creating an environment for continued high levels of occupation and future rental growth.
Industrial REIT said the acquisitions added a further 31 units across 82,538 square feet (7,668m2) of multi-let industrial space and generated an annual rent of £550,000, reflecting an average rent of £7.71 per square foot, in addition to the 136,000 square feet, 37-unit estate the company bought in that location in November 2020.
The three additional terraces were 87% occupied by 26 tenants and the vendor was providing a six-month guarantee on the vacant units.
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