Two Yorkshire deals for property investor
LONDONMETRIC, the property investor, has announced two Yorkshire deals.
The group has exchanged on the sale of the nine-screen Odeon Multiplex cinema in Huddersfield for £15.2m to TIAA Henderson Real Estate. The firm has also exchanged on the purchase of the Royal Mail distribution unit (152,000 sq ft) at Magna 34 in Rotherham for £10.3m.
Sheffield-based contractor and developer JF Finnegan sold the Royal Mail distribution unit and was represented by Commercial Property Partners as agent and DLA Piper as lawyer, with CBRE acting as agent for LondonMetric.
The property is let to Royal Mail Group on a 15-year lease, with fixed uplifts in 2018 and 2023, for the group’s express parcels business, Parcelforce Worldwide. The D01 unit at Magna 34 is Parcelforce Worldwide’s largest distribution centre in the country outside of the main Coventry hub with 150 staff managing around 90 vehicle deliveries and 12,000 parcel movements each day, which can peak at 25,000 parcel movements in busy periods. The new depot formed part of a multi-million pound UK-wide expansion programme which was estimated to bring some 115 jobs to Rotherham in a three-year period.
Gary Smith, managing director of JF Finnegan, said: “The lease to Royal Mail Group confirmed our belief that the quality of product and strategic location on offer at the Magna 34 unit would attract a high profile tenant. The subsequent sale to LondonMetric Property concludes the property’s success story and demonstrates that the South Yorkshire region is on the map for investors seeking sound opportunities.”
Roger Haworth, partner at Commercial Property Partners, added: “This deal is a great result in the current market where there is strong demand for prime, long-let distribution assets with fixed uplifts, let to good covenants. The high profile nature of Royal Mail, which was listed on the London Stock Exchange in October 2013, coupled with the quality of build, proved key in attracting investor interest.”
Parcelforce is rapidly expanding within Unit D01 at Magna 34 Business Park in response to the buoyant home delivery market resulting from internet sales through customers such as Amazon.
Nigel Howard, head of DLA Piper’s Real Estate team in Sheffield, said: “This transaction is a great result for JF Finnegan, a strategic move that will enable it to invest in future growth in our region and beyond. Whilst Magna is a renowned and well-connected business park, the ability to get such a high quality sale over the line certainly reflects an improving market in the city region.”
LondonMetric also announced this morning that it has exchanged on the sale of three DFS warehouse units to Hawkeye Properties Limited for £17.1m. The assets are in Ashby, Bury St Edmunds and Droitwich and were part of the original 27 DFS asset portfolio acquired by the Joint Venture in March 2014 for £175m. Following this disposal and the previous sale of ten DFS assets announced in March, the Joint Venture now owns a portfolio of 14 DFS assets.
Andrew Jones, chief executive of LondonMetric, said: “Over the last few years we have successfully acquired well priced investment and development opportunities.
“Our portfolio acquisitions of Odeon and DFS units at the end of last year have allowed us to right-size these portfolios and crystallise gains on some of the units, capitalising on the increased institutional demand for long leases and delivering an attractive yield arbitrage over a very short period of time.
“We will continue to realise those investments where we have optimised value and do not expect them to benefit further from our asset management expertise. We will look to recycle the capital into other opportunities within our core sectors and are extremely pleased to have secured our second Royal Mail distribution centre. This will further strengthen our relationship with them as well as delivering a long, strong and growing income.”
Fawcett Mead advised LondonMetric on the sale of Berkhamsted and Knight Frank advised Lothbury. Savills and Allsop advised LondonMetric on the DFS sales. CBRE advised LondonMetric on the Royal Mail purchase.
