144,000 sq ft Bradford warehouse snapped up
A REAL estate investment trust has acquired a major Bradford warehouse, totalling 144,000 sq ft.
AEW UK REIT, which owns 28 regional properties, has bought the warehouse on the Euroway Trading Estate in Bradford for £4.95m.
This reflects a net initial yield of 8.1%, reversionary yield of 8.9% and a capital value of £34 per sq ft.
It is currently leased to Advanced Supply Chain on an eight-year lease, at a low passing rent of £2.98 per sq ft, which the REIT said could be increased in future.
The site is located near Junction 2 of the M606 and is close to Leeds (17km) and Manchester (60km). It shares the part with a number of distribution operators including Marks and Spencer, whose 1.1 million sq ft regional distribution warehouse facility is directly adjacent.
Alex Short, REIT Portfolio Manager at AEW UK investment management LLP, said: “The acquisition of this well located logistics asset, on an attractive yield, is underpinned by the rapid growth we are seeing in online retail, which is leading to an increased occupier demand for logistics warehousing.
“The current low level of rent offers significant upside potential and we believe that that the acquisition pricing is well supported by the asset’s underlying vacant possession value, while fitting with our stated strategy of acquiring higher-yielding, income producing assets that offer asset management and rental growth opportunities.”
Following the acquisition, the Company has invested a total of £128 million across 28 regional commercial property assets and has a £9.33m investment in AEW UK’s Core Property Fund.
