Mondi Group has bought its 174,000 sq ft Deeside warehouse in a £9m deal as logistics occupiers take advantage of a rising property market.
The company had been paying a rent of £674,000 a year, with the prospect of its rising to £720,000 a year, according to agents advising on the sale.
The move follows the acquisition by the specialist food packaging business of of Deeside-based Excelsior Technologies. The business changed hands in February for nearly £33m.
Mondi is one of many businesses calculating that it is worth buying their own premises. They had a lease of 12 years on the premises, amounting to a minimum rent of £8.1m. For many occupiers the freehold purchase price is roughly equivalent to the rent – but offers the prospect of capital growth, the opportunity to sell or redevelop, and the benefit of taking control.
The site is close to the junction of the A494 and A548, an area attracting signigicant developer interest, which suggests capital growth is likely. Praxis Holdings is proposing 2.5m sq ft of logistics floorspace on the 247-acre site of former RAF Sealand, whilst Pochin and Goodman own the neighbouring 180-acres of the former Corus steel plant where 1.2m sq ft is currently planned.
Mayfair-based HSM Surveyors advised on the sale.