Leeds industrial estate bought for £22.7m
A 28-ACRE industrial estate in Leeds has been bought for £22.7m.
Schroder Real Estate Investment Trust has acquired Millshaw Industrial Estate, a 463,400 sq ft site with 20 tenants located near to junction 1 of the M621.
It produces annual rental of £1.73m, at an average of £3.77 per sq ft which reflects a net initial yield of 7.25%, with four vacant units representing 4% as a percentage of rental value. The average unexpired lease term is 5.5 years assuming the earlier of lease expiry or tenant break option.
However Schroeders believes the restricted supply of new industrial and warehouse development in Leeds “creates an opportunity to reposition the estate” by refurbishing units as leases expire in order to achieve higher rents.
It estimates the rental value of the estate could be £2.2m per year, or £4.80 per sq ft, resulting in a reversionary yield of 8.4%.
The purchase has been part-financed by a £20.5m revolving credit facility (RCF) from Royal Bank of Scotland.
Duncan Owen, global head of real estate at Schroders, said: “This acquisition, together with the new RCF facility, supports our strategy to increase net operating income whilst also providing opportunities for active management to add value.”
Graham Foxton, investment partner with Knight Frank in Leeds, advised Schroders on the acquisition.
