West Mids sites in multimillion-pound sell-off
Five major West Midlands sites have been sold as part of two deals totalling more than £350m. The Birmingham Mail Centre and Daventry's DIRFT site have been acquired by SEGRO and Moorfield Real Estate Fund II (MREF II)'s joint venture as part of a £315m deal.
The joint venture, named UK Logistics (Jersey) Limited Partnership, purchased the UK Logistics Fund (UKLF) for £314.7m in cash from Hermes Real Estate Investment Management Limited, Legal & General and LaSalle Investment Management.
The portfolio comprises 14 prime warehouse units across the UK, including the two West Midlands sites.
In 2011, the portfolio will have a net income of about £18m per year, said the new owner, and at acquisition the contracted rent was about £21m per annum.
The acquisition is currently expected to complete by the end of January 2012.
It was also revealed this morning (19 December) that the Conygar Investment Company had bought various properties across the West Midlands as part of a £39.9m deal.
Conygar has snapped up nine properties from a consortium including Edinmore Group and Buccleuch Property across England and Scotland.
The annual rent roll is said to be approximately £4.22m representing a net initial yield of 10.56 per cent. The weighted average lease length at 4.26 years with 89 per cent occupancy.
The deal is set to completed using Conygar's existing cash resources with directors expecting the portfolio to be refinanced in due course.
In the Midlands, the properties bought include:
- Norfolk House, Birmingham - a 115,000 sq ft site with 89,000 sq ft of office space with the rest being retail space. It is located next to the Bull Ring in Birmingham City centre and has annual income £949,533 per year.
- Tollgate Business Park, Stafford - a 55,000 sq ft freehold industrial/office building let to Elster Metering until April 2015 at £291,000 per year.
- Network House, Wolverhampton - a 33,300 sq ft site including 14,000 sq ft of offices and 19,300 sq ft of retail space.The existing office accommodation is currently vacant, however the property is said to offer a "considerable redevelopment opportunity". Current rental income is £113,000 per year.
Robert Ware, chief executive of Conygar, said: "This is an excellent off-market opportunity for Conygar, which is consistent with our strategy of acquiring assets and development opportunities where we can add further value.
"It is a high yielding portfolio with a good spread of risk and offering considerable upside from both lease re-gears and development opportunities.
"The assets are a good fit with our existing portfolio and will generate surplus cash from day one."
