Warehouse group in £82m deal for two new assets
Warehouse REIT has acquired two new assets in Cheshire and the East Midlands for £82m.
The AIM-listed specialist warehouse investor, which has a Chester base and manages properties throughout the region, announced the deal for two single-let warehouse assets occupied by Amazon and Wincanton, respectively.
These latest additions to the company’s portfolio follow its successful equity raise that completed last month, delivering equity of around £153m and more than £200m of investment firepower.
The East Midlands property is strategically located just off the M1 motorway, the key logistics spine of the UK, outside the town of Chesterfield.
The prime 500,000 sq ft fulfilment centre is let to Amazon UK on a full repairing and insuring lease with more than 13 years remaining, benefiting from five-yearly upward-only rent reviews with no breaks.
The company has acquired the asset for a cash consideration of £57m from Tritax Big Box REIT and when combined with the other Amazon-occupied properties in Warehouse REIT’s portfolio, at more than £4m rent per annum as a result of this acquisition, the e-commerce giant is now the largest tenant on the company’s rent roll.
The second acquisition comprises a 374,000 sq ft single-let warehouse located next to the 29 acre multi-let estate at Midpoint 18 in Middlewich, Cheshire, which was acquired by the company last year and increases Warehouse REIT’s total holding at this location to more than 550,000 sq ft.
The asset, acquired for a cash consideration of £25m, is occupied by Wincanton Holdings, the UK’s largest third party logistics operator, and has 3.5 years remaining on its lease off a low passing rent of approximately £5 psf, which compares favourably with lettings that the company has recently achieved on the wider estate.
New-build development activity locally reinforces the strength of the Midpoint Estate’s distribution location, which sits within two miles of Junction 18 of the M6 motorway and approximately 26 miles south of Manchester.
Andrew Bird, managing director of the investment advisor, Tilstone Partners, said: “Following the successful equity raise completed in July, it is pleasing to be able to deliver these high-quality acquisitions, which show good progress with Warehouse REIT deploying the proceeds raised into high quality e-commerce focused assets, both identified as part of the fundraise pipeline.
“The properties make a significant contribution to enhancing the overall portfolio quality and with the continued acceleration of the global ecommerce market, we are pleased that Amazon becomes the REIT’s largest tenant.
“The Cheshire asset provides both short and longer-term value-enhancing asset management opportunities and increases our footprint in what has proved itself to be a prime North West logistics location.”
He added: “We look forward to integrating these assets into the wider portfolio, while we continue to work through our pipeline of identified opportunities for the REIT to deploy the remaining proceeds from the recent equity raise ahead of schedule and allow the targeted scale to be achieved, whilst driving shareholder returns.”