BMO commercial property trust has beefed up its logistics portfolio, spending £66m on sheds and committing £10.5m to two developments.
The commercial property trust has paid £44m for Orion One and Two, at Markham Vale in Derbyshire (pictured). The price reflects an initial yield of 3.7% and a low capital value of £148 per sq ft. The units, part of a 200-acre redevelopment scheme, were completed in April 2021.
The 224,424 sq ft Orion One is let to The National Lighting Company for £1.29m pa until August 2031. The 75,958 sq ft Orion Two is let to Smurfit Kappa until 2031 for £475,000.
It has also forward-funded the redevelopment of Unit 4 at the Quintus Business Park in Burton-Upon-Trent, for £20.1m The plot will be redeveloped as a 171,550 sq ft logistics warehouse, let to Werner UK.
The deals represent the first phase of the re-investment of the £199.5m proceeds from the sale of Cassini House in London and two retail warehouse assets in East Kilbride and Rochdale.
BMO has embarked on a strategy of recycling capital to increase its exposure to prime industrial and logistics with strong ESG credentials.
During lockdown the company delayed un-committed capital expenditure, but in light of improving markets it has revived two of its larger projects. At Estuary Business Park, Speke, Liverpool, where it will speculatively develop a 52,000 sq ft mid-box logistics unit on land it already owned. The total construction cost is expected to be in the region of £4.8m, with an income return on cost forecast to be around 6.5% when let.
In Colchester it has secured planning permission to demolish an obsolete unit at the Cowdray Centre, which will make way for a £5.7m, 35,000 sq ft multi-let park.
To send feedback, e-mail piers.wehner@eg.co.uk or tweet @PiersWehner or @EGPropertyNews
