M&G acquires London warehouse for 5.25% yield

M&G Real Estate has bought a 9,950 m2 distribution warehouse in Park Royal, London, from Standard Life Investments.

The £23 mln (€28 mln) acquisition represents a net initial yield of 5.25%.

One Park Royal is let in its entirety to Enotria Wine Cellars on a full repairing and insuring lease for a term of 15 years, expiring in May 2029. Following an expansion programme, the facility will become Enotria’s new UK headquarters.

'Investor demand for UK distribution warehousing has remained robust throughout 2014,' commented Adam Coulston, director of Investment Management at M&G Real Estate. 'Park Royal has seen strengthening tenant demand over the past 12-18 months due to its core industrial location in London, with good communication links and a significant critical mass of occupiers. We believe rental growth prospects are good, which will assist in achieving excellent returns for our investors.'

DTRE represented M&G Real Estate, while CBRE advised Standard Life Investments.