Coventry site parcelled up in £10m portfolio deal

Parcel group Tuffnells has sold and leased back six depots after failing to find a buyer for a larger number of properties.

It has agreed a £9.9m sale to Urban Logistics of the depots, which range from Perth to Plymouth and includes its Coventry depot at Bermuda Industrial Estate in Nuneaton.

The portfolio comprises 84,872 sq ft of warehousing and is a mix of freehold and long leasehold properties.

Tuffnells owner, Connect Group, had been looking to sell a larger number of sites but last month admitted that “current market conditions and outlook” meant it did not expect to complete a deal in this financial year.

Instead it has divided the portfolio into smaller tranches in order to try and meet its targets on deal value and timing.

Jos Opdeweegh, chief executive of Connect Group, said: “The sale and leaseback of this tranche of properties is another step in our strategic plan and ambition to reduce the Group’s net debt position.

“We will continue to explore other possible sale and leaseback opportunities for the remaining Tuffnells freehold real estate portfolio where those opportunities meet the Board’s expectations in respect of value, economic return and timings as this transaction with Urban Logistics does so.”

The depots will be leased back to Tuffnells for 20 years. An RPI-linked fixed rental uplift ranging from 1-4% per year has been put in place.

Richard Moffitt, chief executive of Urban Logistics, said: “We continue to focus on creating value across the portfolio and securing attractive acquisitions. We’re delighted to have further diversified our portfolio, through the leasing agreement with Tuffnells.”

Post-acquisition, Tuffnells will represent approximately 6.0% of the Company’s rent roll.