Schroder UK Property Fund has acquired Tata Steel’s UK distribution hub in Wolverhampton from Threadneedle Property Investments Management.
Schroder UK Property Fund has acquired Tata Steel’s UK distribution hub in Wolverhampton from Threadneedle Property Investments Management.
The transaction price comes to £34.10 mln (€41 mln), reflecting a net initial yield of 9.00%.
The 24-hectare site, known as Steel Park, comprises three industrial warehouses, a headquarters office building and a study centre totalling 761,614 sq ft (71,000 m2). The entire site is let to Tata Steel UK on leases with 12 years remaining.
'This purchase forms a key part of our strategy to invest in regional real estate underpinned by the recovery we are seeing in UK manufacturing,' said James Lass, fund manager of Schroder UK Property Fund. 'We continue to witness a significant yield arbitrage over other parts of the market and anticipate this gap will narrow as we move further into the cycle.'
Tata Steel UK is a producer and distributor of steel for the automotive, construction, energy, rail, and consumer goods sectors. The Steel Park is the largest Tata distribution facility in Europe.
Knight Frank represented Schroders; Collingwood Rigby acted for Threadneedle.