Warehouse sold in multi-million pound deal
A MAJOR distribution centre in South Yorkshire operated by one of the UK’s best known retailers has been sold for more than £30m.
LondonMetric Property has bought the Marks & Spencer Distribution Centre in Sheffield , which has two units totalling 625,900 sq ft, from clients of CBRE Global Investors in a £32.2m deal.
M&S recently entered into a new ten-year lease expiring in November 2023 on both units, which are based at the Sheffield International Rail Freight Terminal (SIRFT), with a tenant break option on unit two after five years, and has made a commitment to invest in the asset as part of a drive to improve its logistics portfolio.
Andrew Jones, chief executive of LondonMetric, said: “This purchase reflects a very attractive initial yield that delivers attractive cashflow to the group, as well as strengthening our relationship with one of the UK’s leading retailers. The asset offers excellent asset management opportunities to work with M&S to secure their long term occupation of the property.
“The acquisition is consistent with our strategy to acquire high yielding assets which can benefit from our active asset management approach and strong occupier relationships.”
Following this acquisition, the LondonMetric distribution portfolio comprises 12 distribution centres with a combined value of £294m, representing 27% of the enlarged group’s portfolio
The acquisition will be funded from the group’s existing resources.
Although unit 2 is currently expected to be affected by the second phase of HS2, discussions on the exact routing are still ongoing and works on this second phase are not scheduled to commence until 2023. LondonMetric will now actively engage, alongside M&S, on discussions over the exact routing of phase 2.
Cushman Wakefield advised LondonMetric and CBRE advised CBRE Global Investors.
