LGP acquires London rail freight terminal from AXA

Legal & General Property (LGP) has completed the acquisition of Barking Rail Freight Terminal in London from AXA Real Estate for £53.7 mln (€75 mln).

The property was acquired on behalf of LGP’s clients and its JV partner dmi Properties.

Situated 19 kilometres east of Central London and within the M25 motorway, Barking is a key industrial and commercial location due to its excellent access to Central London, the wider south east and the national motorway network. The site is one of only two competent intermodal freight terminals serving London and the international rail network, as it is the most northerly point on the network capable of accommodating European gauge wagons.

Occupying 32.67 acres (13.2 hectares), the site is fully let to DB Schenker for a term of 20 years from July 2014. The passing rent is subject to fixed increases over the first five years followed by upward-only five yearly rent reviews linked to uncapped RPI.

Adam Kerr, head of long income transactions at LGP, commented: ‘The acquisition offers the opportunity to acquire the freehold of a major strategic rail head in east London giving direct access to the European rail network. Rail freight is set to expand substantially over the next decade, with growth being driven by demand for consumer goods and the need to find more sustainable modes of transport.’

The property represents the fourth UK rail terminal to be acquired by LGP, with other assets comprising terminals in Widnes, Castle Bromwich and Corby.

JLL acted for AXA Real Estate, while WHY and Rubicon Securities advised L&G on this transaction.

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