Fradley Park sold off as part of £226.5m deal

THE huge Fradley Park industrial estate near Lichfield has been bought by Legal & General Property (LGP) as part of a £226.5m deal.

It has bought the entire Ocean Portfolio in a deal representing a net initial yield of 6.50%.

The transaction was conducted jointly on behalf of Legal & General’s £1.7bn UK Property Fund (UKPF) and its £1.2bn Industrial Property Investment Fund (IPIF).

Fradley Park has been developed by Evans Property Group.

The Ocean portfolio comprises 13 properties located throughout the UK with a significant weighting to the Midlands and North East, with nearly three quarters of the total portfolio value derived from the two largest assets: Fradley Park, Litchfield and Follingsby Park, Gateshead.

In total, the portfolio has 142 tenants and is arranged over 3,798,871 sq ft with a further 48 acres of development land. The portfolio has an average weighted unexpired lease term of 4.9 years.

The assets will be divided between UKPF and IPIF, providing UKPF with access to the four larger distribution warehouse parks, with IPIF acquiring the eight smaller multi-let estates.

UKPF has grown from £100m since inception, acquiring £487m of assets since the start of the year, as it continues to see an inflow of capital from both retail and institutional investors.

Matt Jarvis, fund manager of the Legal & General UK Property Fund, said: “Providing a strong alignment to the fund’s strategic objectives, the impact of the acquisition will include an increase in yield and a higher weighting to good quality product in a sector we expect to outperform in the medium term.

“The purchases complement the fund’s current stock and style picking preferences, offering very good locations and modern warehousing, as well as presenting it with numerous and varied asset management initiatives to pursue over the short and medium term.”

JLL advised Legal & General and DTZ advised the vendor.