UKCM is forward funding a trio of sheds near Gatwick Airport to the tune of £25m.
The Sussex Junction development is due to complete in early summer 2022, and will deliver approximately 107,000 sq ft of multi-let industrial space. Two of the units, amounting to 56% of the total, are prelet on a 15-year lease to geoscience technology company CGG Services at an average rent of £13 per sq ft.
The asset is expected to show an attractive development yield of 5.8% pa.
UK Commercial Property REIT, which is managed and advised by Abrdn, said the sheds complement the existing industrial portfolio, which represents 63% of the REIT’s portfolio. The portfolio delivered a total return of 28.3% for the 12 months to 30 September.
Kerri Hunter, interim lead manager at UKCM, said: “We are accessing industrial stock in an incredibly competitive market at a significant discount to an up-and-let investment. At an expected development yield of 5.8%, the creation of a high-quality multi-let industrial asset in a strong location with limited available stock will help deliver enhanced returns to shareholders.”
Hunter added that more deals were in hand: “We have a strong pipeline of further interesting acquisitions and are confident of deploying the Company’s remaining cash resources in the foreseeable future.”
Lewis Ellis acted for UKCM.
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