Urban Logistics, the specialist UK industrial and logistics REIT, is pleased to announce that it has sold a site located in Nuneaton for £8.1m. The 130,508 sq ft building was purchased as part of a portfolio in September 2017 for £6.7m.
The site is being sold to an owner occupier, Cofresh Limited, and realises a profit on cost of 21% and IRR on equity invested at the property level of 24%.
At the same time the Company has purchased a logistics property in Thatcham for a total consideration of £3.4 million, (the "Acquisition"). The purchase price represents a net initial yield of 5.9%. The site has a rent of £7.97 per sq ft and a reversionary yield of c. 7.0%, (given expected rental growth and its South East location serving the Reading, Henley and Newbury areas).
The Acquisition is consistent with the Company's investment strategy of identifying well located and attractively priced stock with asset management potential; and the site sits within a location that is seeing strong rental growth, eight miles from the M4. The site comprises a 26,478 sq ft logistics warehouse let on a new five-year lease to DHL’s UK Mail, which uses it as a last mile strategic hub and a key part of its distribution network.
The Acquisition is being financed from the Company's cash resources.
Commenting on the Acquisition, Richard Moffitt, Chief Executive, said: "I am extremely pleased with the Disposal which has realised a strong return for shareholders.
"The timely re-investment of proceeds and acquisition of this well-located, institutional-grade distribution site let to DHL’s UK Mail offers strong rental growth prospects and asset management opportunities in the future, ensuring the portfolio continues working for shareholders.
"Looking ahead, we remain opportunistically acquisitive, focusing on assets that serve the ‘last mile’ needs of a diverse tenant base, especially those responding to the challenges of e-commerce and supply chain constraints."