Industrial developer Chancerygate wants to enter the retail warehousing sector.
It plans to create a £100m out-of-town retail warehouse portfolio in the Midlands and the north of England.
Chancerygate has launched the initiative with the £21.5m purchase of a 105,000 sq ft (9,750 sq m) B&Q building from AMEC, at South Rings business park on Lockston Lane, Preston, at a net initial yield of nearly 7%.
It said it was eyeing another seven sites in the North and was hoping to secure four more sites by the end of June.
Chancerygate has previously only bought a retail warehouse as part of a portfolio purchase.
The Preston site includes an adjoining retail unit, let to Burger King.
B&Q, which has 24 years remaining on its lease, currently pays a rent of £1.5m pa.
Last summer Hammerson entered the retail warehousing market for the first time, and subsequently acquired Grantchester, citing the strength of the asset class.
But Chancerygate group chairman Andrew Johnson said he was not concerned that the retail warehouse market might have peaked.
“Our investment strategy is currently focused on the Midlands and north of England areas,” said Johnson. “The yield we have bought off will improve as we believe the development is reversionary and that there will be rental growth to come.”
Whitaker Horton advised Chancerygate and King Sturge acted for AMEC.
EGi News 13/01/03
