BMO Real Estate Partners (BMO REP), part of Canada’s BMO Financial Group’s £227 bn Global Asset Management business, has committed to the acquisition of three modern logistics assets representing 22,000 m2 for £32.9 mln (€38 mln).
The transactions, which were carried out on behalf of a UK segregated mandate client, form part of BMO REP’s strategy for its client to diversify out of larger and older distribution centres into modern and strategically located logistics facilities in areas of strong demand across the UK.
The first transaction is a £11.6 mln, net initial yield 4.5%, forward commitment for an 80,000 sq ft logistics warehouse on the Futura Park commercial district in Ipswich. The property is pre-let to Hubbard Products (guaranteed by Daikin Europe), a leading air conditioning manufacturer, on a 20-year lease. The freehold asset is due for completion in April 2021.
The second transaction represents a £11 mln, net initial yield 4.6%, forward commitment for a 56,800 sq ft logistics warehouse in Aston within the Advanced Manufacturing Hub, which is 2.5 miles north of Birmingham city centre. The freehold asset is being built to a high specification and will comprise 40,000 sq ft of warehouse space and 16,800 sq ft of office space across three floors. The asset, which is due for completion in July 2021, is fully pre-let to Truflo Marine (guaranteed by IMI), a global engineering business, on a 15-year lease with a break at 10 years.
The third transaction is the £10.3 mln, 5.4% net initial yield, acquisition of an up and built modern mid-box industrial warehouse estate, known as Teltron Point, comprising three units totalling 99,867 sq ft. The units are let to three separate tenants on an average WAULT of 10.9 years.
Matthew Howard, fund manager at BMO REP, commented: ‘Our objective for the client has been to recycle the proceeds of recent sales into a diversified pool of modern logistics facilities in well-connected strategic locations with sound economic drivers. We are delighted to have continued this programme with the purchases in Ipswich, Birmingham and Swadlincote.’
