UKCM buys Midlands warehouse portfolio for £85m

UK Commercial Property REIT has bought a portfolio of five distribution warehouses in the Midlands from Clipstone Logistics REIT for £85.4m. The deal reflects a net initial yield of 5.5%. The acquisition has been funded from existing cash resources. The portfolio totals 909,030 sq ft and is 100% let to a mix of tenants with a low average headline rent of £5.52 per sq ft and an unexpired lease term of 7.4 years to break and 9.6 years to expiry. The assets are located on established industrial parks across the East and West Midlands, close to the M1 and M6 motorways, at Cannock, Derbyshire, Leicester, Stoke-on-Trent and Newcastle-under-Lyme. The transaction increases UKCM’s industrial exposure to 45% of the total portfolio value. Will Fulton, lead manager of UKCM at Aberdeen Standard Investments, said: “We believe that this acquisition balances our exposure to the industrial sector, which has good prospects for rental growth, through the addition of more diverse and well located regional assets. “As the structural changes from the widespread adoption of e-commerce in the UK pervade, a trend which has proven resilient against a backdrop of Brexit negotiations, we expect the outperformance of the logistics market to continue as occupier demand for space remains high.” To send feedback, e-mail anna.ward@egi.co.uk or tweet @annaroxelana or @estatesgazette