Warehouse group announces 10-year renewal deal worth £6m
Warehouse REIT, the AIM-listed specialist warehouse investor which has a Chester base, has completed a 10-year lease renewal worth £615,000 a year.
The deal is with Iron Mountain, the NYSE-listed storage and information management services company, for a property at Stretton Green Distribution Park, Warrington.
Iron Mountain, which services 230,000 customers in more than 50 countries and generated revenues of around £800m in the first quarter of 2020, has occupied the 106,000 sq ft single-let purpose built high bay warehouse since 2005.
The 10-year lease renewal, with no breaks, has been agreed at a 26% uplift to the previous rent paid, with a headline rent of £615,000 per annum, or £5.80 psf.
The agreement reflects the strong demand for high-quality warehouse facilities in the North West, as well as the strategic importance of the unit to the tenant’s UK client base.
Stretton Green Business Park is located two miles from junction 20 of the M6 and M56 interchange, close to the major conurbations of Manchester, Liverpool and Warrington.
The warehouse was one of seven properties in a 995,100 sq ft portfolio acquired by Warehouse REIT in September 2019 for an initial consideration of £70m, the value of which increased by 7.4% in the subsequent six months.
This letting will further enhance income and value, increasing the WAULT (weighted average unexpired lease term) for the entire Warehouse REIT portfolio from 5.2 years to 5.4 years.
Paul Makin, investment director of Tilstone Investment Partners, said: “This major lease renewal with an extremely strong covenant is the latest illustration of our ability to significantly improve the rental tone across Warehouse REIT’s portfolio, actively working with our tenant partners to reach a solution that benefits both owner and occupier.
“Whilst we continue to be rigorously focused on cash collection in order to mitigate the near term economic challenges posed by COVID-19, we are alive to all opportunities resulting from the consequential acceleration of favourable structural trends which are underpinning occupier demand for space across the portfolio.”