British Land is buying three warehouses at Hannah Close in Wembley, north-west London, in a £157m deal.
The acquisition of the 245,000 sq ft of sheds on a 12.5-acre site is part of the REIT’s strategy to diversify into the booming urban logistics sector.
BL said the development-led opportunity to buy the three units aligned to its “strategy of delivering new urban logistics space through the intensification and repurposing of existing buildings”.
The properties are currently let to Amazon, Euro Car Parts and the North London Waste Authority and generate an annual income of £3.6m with “significant” reversion potential. BL said there was a medium-term opportunity to deliver a multi-storey, urban logistics hub for central and west London on the site.
The area around Hannah Close is designated a strategic industrial land location, promoting industrial employment and development and offering good road and rail connectivity, essential for last-mile urban logistics operators. It also provides good access to the Underground, helping to attract staff.
BL chief executive Simon Carter said: “This acquisition is another example of the strong progress we are making against our strategy to address the chronic shortage of urban logistics space in central London via intensification and repurposing. Wembley is ideally located for vehicles coming into London and subsequently out for delivery, with excellent access to affluent parts of the capital.
“This latest acquisition follows acquisitions in Enfield to the north of London, Thurrock to the east and Finsbury Square in the city, and along with opportunities we have identified on our standing portfolio, brings the total gross development value of our urban logistics pipeline to over £1bn, with a blended forecast IRR from acquisition of circa 15% across the pipeline.”
The deal is expected to complete in mid-February.
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