The world’s largest used car dealership has paid a record 4.1% yield for a London shed.
Cargiant has paid Prologis £38m for an H&M-let shed in Wembley, north-west London. It intends to use the 140,000 sq ft site to house tenants that will be displaced should its plans to build 9,500 homes at Old Oak Common, NW10, come to fruition.
The firm is battling with Premier League club Queens Park Rangers over land at Old Oak Common, which both are seeking to redevelop.
The deal surpasses the record 4.6% yield for a prime UK shed set by Legal & General in May 2014 when it forward funded a Waitrose-let facility in Milton Keynes.
The motivated buy reflects a capital value of £276 per sq ft, exceeding prime residential values in major regional cities such as Birmingham and Leeds.
DTZ has forecast that shed yields will contract to 5% in 2015 owing to the depth of investor demand and the rosy occupational outlook.
A source said: “Prologis does not want to divest in west London, but it could not refuse this offer. The deal shows Cargiant’s resolve, hence such a steamy price.”
Sources said Cargiant would be hoping that the acquisition and now ability to rehouse tenants would give it the upper hand in the ongoing battle to redevelop Old Oak Common.
QPR’s rival plans are for 24,000 homes and a new stadium. However, it does not control the entire site and would need to purchase land owned by Cargiant and others.
Cargiant is shortly to launch a consultation on its own plan for the site, which the company is adamant should not be the venue for the football stadium.
DRTE advised Prologis on the off-market deal; Cargiant was unrepresented.
