Valor buys last-mile logistics estates for sub-3% yield

Valor Real Estate Partners has bought two urban logistics estates in Mitcham and Watford from DTZ Investors for £70.7m, reflecting a combined 2.35% net initial yield. Mitcham Industrial Estate (pictured above) was purchased for £38.5m, while Watford Interchange was acquired for £32.2m. The 3.1-acre Mitcham estate comprises 100,381 sq ft and is 72% occupied by tenants spanning the self-storage and DIY sectors, including Selco Trade Centres, Floorsave London and PD Self Storage. It includes a near-term repositioning opportunity, via the heavy refurbishment of a vacant facility. In Watford, Valor acquired a 2.87-acre site with four facilities totalling 58,973 sq ft. It is fully let on long-term tenancies to RS Components, Saniflo, Peerless AV and Hancocks Holdings. Valor said both locations are characterised by an acute demand-supply imbalance, driven by competition from alternative uses and an increasing need for businesses to have access to dominant metropolitan centres in shorter drive times. [caption id="attachment_1136956" align="aligncenter" width="847"] Watford Interchange[/caption] Jeremy Achkar, vice president of investments at Valor, said: “Watford and Mitcham are two of the London area’s most supply-constrained submarkets. These purchases both offer the ability to drive the rental tone through active asset management, which we look forward to effectuating in short order.” Gavin Richmond, fund manager at DTZ Investors, said: “The continued strength of the Greater London industrial market has presented an opportunity to exit some of our larger holdings and, in doing so, deliver attractive returns for our investors.” Charles Howard, partner, logistics and industrial at Cushman & Wakefield, which advised DTZ on both deals, said: “These transactions illustrate the considerable capital that remains for Greater London industrial assets. Both estates offer excellent connectivity, access to central London and attractive reversionary potential – ideal characteristics for a wide range of last-mile and urban logistics operators – and strong rental growth potential.” Valor REP was represented by Clifton on the Watford transaction and DTRE on the Mitcham deal. To send feedback, e-mail pui-guan.man@eg.co.uk or tweet @PuiGuanM or @EGPropertyNews See which agents are doing the most industrial investment deals with our On-Demand Rankings >> Photos: Mitcham © DTZ Investors/Cushman & Wakefield Watford © Valor Real Estate Partners