Amazon is causing a rally in the logistics investment market with the covenant of the e-tail giant pushing yields down to near record lows.
John Cutts’s Mountpark Logistics has sold a 277,089 sq ft Amazon-let distribution warehouse at Airport City Manchester to German asset manager Hansainvest for £34.8m – a yield of close to 4.5%.
At the start of the year, Mountpark let the shed to Amazon on a 15-year lease at a rent understood to be around £6 per sq ft.
Two of the three lowest yields paid in the UK logistics market this year have been for Amazon-let assets.
In April, a Korean investor advised by BNP Paribas REIM paid £126m for a 1.3m sq ft Amazon warehouse built by Mountpark in Bardon, Leicestershire, at a 4.5% yield, in what was the largest logistics transaction in UK history.
Last month, Amazon leased a further 1.1m sq ft at Verdion’s iPort development in Doncaster, South Yorkshire, which is expected to have an end value of close to £105m.
Kevin Mofid, head of logistics and industrial research at Savills, said: “It is clear that investors are getting more comfortable with Amazon as an institutional-grade covenant as they strive to gain exposure to the growing online retail sector.”
The lowest yield seen for a logistics asset in the UK was 4.15%, when Eyre Estate paid Roxhill and AXA IM – Real Assets £17.3m last July for a 66,000 sq ft shed at Orion Park in Dagenham, east London, let to logistics firm GeoPost.
DTRE advised Mountpark; JLL advised the buyer.
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