M&G Investments has emerged as the buyer of a 736,708 sq ft (68,500 m2) prime distribution unit in Peterborough, UK from Fiera Real Estate UK. The asset was sold for £120 mln (€144 mln), reflecting a net initial yield of 3.2%.
The unit is situated on a site of 34 acres and comprises a state-of-the-art distribution warehouse. The unit has recently been let to Amazon on a new 15-year lease. The property, formerly Debenhams national distribution centre, became vacant in April 2021 and re-let, firstly under license and subsequently for a 15 year lease following competitive interest from various occupiers through the summer.
This represents the final asset sale from UK Real Estate Fund I, an FRE UK separately managed account for Kuwaiti investors, focused on core investing across distribution, retail warehouse and offices assets.
Rupert Sheldon, head of Core REIM at FRE UK commented ‘We are delighted to have completed on the sale of this high performing asset which aligns well with the investment parameters of our separately managed account programme.’
Charles Allen, head of Transactions at FRE UK added ‘The sale marks the end of this particular Fund which has seen c.£158m of sales across two assets in Q4 2021. We will be actively looking to re-invest all the capital into core / core plus assets in 2022.’
