Gazeley is selling its first major asset since its takeover by Brookfield Asset Management, setting a record yield for a shed since the downturn.
Aviva Investors is understood to have placed the industrial developer’s John Lewis scheme at Magna Park, Milton Keynes, under offer for just over £70m – reflecting a yield of around 5%.
Brookfield said after its takeover of Gazeley in June that it intended to build a shed portfolio and expand the business from a developer and trader of warehousing into a full-service logistics asset manager.
But it is understood to have decided to sell the John Lewis warehouse development (pictured) after receiving a raft of interest from pension funds attracted to its strong covenant and its annuity-style income.
In the end it came down to a two-horse race, with Aviva understood to have narrowly pipped Canada Life to place the shed under offer.
Gazeley signed a deal with John Lewis in March to develop a 675,000 sq ft shed that included the retailer signing a 30-year lease at £5.75 per sq ft with annual RPI linked uplifts.
A source said: “This will set a record for this cycle. But this is a unique asset due to its exceptionally strong covenant. The pension funds were all over it.”
The development adjoins John Lewis’s existing 600,000 sq ft depot at Magna park, which is owned by the Crown Estate.
The Crown bought the Milton Keynes shed in March 2007 from a Gazeley and Land Securities joint venture for £72m – a 4.9% yield.
It looked to sell the warehouse last summer, but then abandoned the plan after agreeing a lease extension with John Lewis.
Savills and Jones Lang LaSalle acted for Gazeley; Colliers International represented Aviva.
All parties declined to comment.
nick.whitten@estatesgazette.com
