HGI buys distribution scheme in Manchester

Henderson Global Investors has acquired the Merlin 310 prime distribution warehouse in Manchester from Aviva Investors for an undisclosed amount.

The 310,000 sq ft (28,800 m2) building is let to TDG UK, but the lease is currently being assigned to Kellogs whose contract is serviced from the unit.

'We expected such a high quality building to attract a lot of investor interest, and the pricing achieved reflects that,' commented Mike Green, head of Industrial Real Estate at Aviva Investors. 'This sale is a good indication of the change in market sentiment towards shorter-dated income streams from good assets, where yields in some cases have come-in 150bps over the last 9-12 months.'

Marcus Langlands Pearse, the fund manager responsible for the purchase at Henderson UK Property Unit Trust noted that the asset represents a high quality property with the opportunity to add value. 'The initial income yield is accretive to our portfolio overall,' he added.

Knight Frank acted for Aviva Investors and DTZ acted for Henderson.