Property group set for 6% yield on £22m warehouse deal

Palletforce

UK Commercial Property Trust is set to achieve a near 6% yield on a £22m warehouse scheme in Staffordshire it acquired earlier this year.

The REIT acquired the 258,370 sq ft distribution unit at Centrum West, Burton-upon-Trent from Goodman in February.

The deal was funded by the sale in January of 13 Great Marlborough Street for £30.5m.

It concluded a pre-let deal with logistics group, Palletforce, which has committed to a 15-year lease based on £5.58 psf – or £1.4m per annum. UKCPT said the rent benefited from RPI inflation-linked rent increases of between 1% and 3% per annum, compounded and effective five yearly.

The deal capitalises on the high demand for commercial/warehouse space in the area and Centrum West, given its location on the A38 corridor, is one of the logistics sites most sought after.

Palletforce was recently named one of the fastest-growing companies in Staffordshire, with an average growth rate of 237% over the last three years.

The new distribution faciilty will be capable of processing in excess of 30,000 pallets per night for distribution across the UK and the continent.

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