UK Commercial Property Trust (UKCPT), which is advised by Standard Life Investments, has completed the forward purchase of a pre-let distribution warehouse development in the West Midlands of England.
The investment volume comes to £22.2 mln (€26 mln), reflecting a yield on capital of 5.8%. The 258,000 square foot (24,000 m2) asset is located in the Staffordshire town of Burton upon Trent.
UKCPT said that the transaction was in line with the trust's strategy to focus its portfolio on assets that deliver a higher and sustainable income. The acquisition will be funded by the proceeds delivered by the disposal in January 2017 of 13 Great Marlborough Street for £30.5 mln, at a 3.3% net initial yield.
The acquisition comprises 6 hectares of land at Centrum West in Burton upon Trent where the vendor, logistics developer Goodman, is developing a large-scale distribution warehouse that has been pre-let to distribution company Palletforce. The tenant has committed to a 15-year lease at £5.58 per ft², or £1.4m per annum, with retail price index inflation linked rent increases of between 1% and 3% per annum, compounded and payable 5 yearly. Completion of the asset is scheduled for summer 2017 when a balancing payment will be paid.
Centrum West is an industrial park situated in a prime logistics location equidistant between Nottingham and Birmingham on the A38 dual carriageway between the M1 and M6 motorways. Once it is completed, the warehouse will have a BREEAM sustainability rating of 'Very Good' with a maximum EPC grade A assessment.
UKCPT was advised by Fulwell Capital, while Goodman was advised by CBRE and Avison Young.
