Investors moving in on single let warehouses

By Liza Helps Property Editor Logistics Matters

TWO RECENT deals are exemplars of this trend. Global investor EQT Exeter has snapped up a highly reversionary warehouse in South Normanton. The industrial warehouse in Amber Park, South Normanton, is fully let to Alloga UK for a further 1.1 years, providing an opportunity to capture significant reversion at lease expiry. AP3 is one of seven units occupied by Alloga within South Normanton which acts as their central UK distribution hub.

The property was sold by DTZ Investors for £16.8 million.

Knight Frank advised DTZ Investors on the disposal, BNP Paribas represented EQT Exeter on the acquisition.

Knight Frank head of industrial capital markets Will Gubb, said: “This transaction demonstrates the continued strong investor demand for reversionary logistics assets with lease events within the next 12-24 months. We continue to see good liquidity in this area of the market, with investors remaining bullish on rental growth performance and re-letting prospects.”

In another deal investor / developer Arrow Capital Partners, acquired a 296,500 ft2 warehouse in South Elmsall, West Yorkshire, let to Superdrug for its Strategic Industrial Real Estate (SIRE) joint venture with Cerberus.

The single-let warehouse was acquired from clients of Columbia Threadneedle Investments (CTI) for over £17 million. The asset comprises a purpose-built cross-docked RDC benefitting from 11.5m eaves and extensive 130m and 55m dual service yards. The property is let to health & beauty retailer Superdrug and serves a key role in the tenant’s supply chain servicing the north of the UK. 

Arrow Capital Partners Head of Real Estate, Europe Robert Howe, said: “This transaction reflects our ongoing commitment to acquire mission-critical assets offering strong reversionary potential for our SIRE joint venture.

“Our focus remains on identifying and acquiring standing investment and development opportunities that offer strong potential for value creation and sustainable returns for our investors."

Arrow Capital Partners was advised on this acquisition by M1 Agency. The vendor was advised by GV&Co.