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Multi-let estates become popular with investors

Multi-let industrial estates are back in fashion with investors, thanks to e-commerce and the coronavirus pandemic.

The latest buy seems Stenprop acquire four more units totalling 43,500 sq ft  fopr £3.75 million.

Multi-let estates, with their scope for urban logistics uses, have become a hot buy for investors. Unlike their shop and office landlords, who have struggled to collect the rent, industrial rents are still being paid on time in the overwhelming majority of cases.

Multi-let property has been relatively low value, but it is increasingly seen as having scope for urban logistics use.

Stenpro has acquired four adjoining warehouse units in Stretton Business Park, in Burton upon Trent, Staffordshire. 

The four modern units are fully occupied on leases delivering a total annual passing rent of £278,000, equating to an average rent of £6.39 a sq ft.

The £3.75 million acquisition reflects a net initial yield of 6.9% and a capital value of £86 a sq ft. 

It is their first acquisition to complete since the start of the Coronavirus pandemic.

 “Despite the challenging macroeconomic backdrop, the outlook for the multi-let industrial sector in the UK remains strong and we continue to be encouraged by the levels of demand for space across our portfolio,” Stenprop head of investment Will Lutton said. 

“The sector is underpinned by a number of prevalent structural trends, led by e-commerce penetration, which have accelerated considerably as a result of Covid-19 lockdown. The income profile of these assets perfectly fits our strategy to grow contracted rent and is supported by the favourable local market dynamics. This acquisition is another step forward in our goal of transitioning our entire portfolio into MLI.  We were close to acquiring this property prior to the Coronavirus outbreak in March 2020 and are pleased to have completed the acquisition on renegotiated terms three months later.”

This announcement is voluntary and for information purposes only.

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