Legal & General Property has confirmed its forward funding of a new major distribution warehouse at Magna Park in Milton Keynes for £114m, as revealed by Estates Gazette last month (L&G pays 4.7% for Magna Park shed).
The deal represents with a record net initial yield for industrial of 4.64%.
Prelet to Waitrose Limited on a 30-year term, the 938,449 sq ft unit is being developed by Gazeley. Waitrose’s parent company, John Lewis plc, already occupies two warehouses on the park, totalling more than 1.3m sq ft.
Purchased on behalf of its annuity fund, Legal & General will be funding the development during the construction period.
The development, which is currently on site, is due for completion in November 2014 and will provide a major new distribution warehouse, including ancillary offices arranged on three levels, a gatehouse, secure yards, parking for 530 cars, 231 HGV’s and 117 tractors, and landscaped areas.
The Park totals 220 acres and has planning consent for 4.4m sq ft of distribution accommodation. To date, Gazeley has delivered 2.07m sq ft of buildings for River Island, John Lewis and Barrs Soft Drinks.
L&G Property head of long income transactions, Adam Kerr said: “This transaction represents a rare opportunity to fund a strategically located South East ‘super shed’ that is capable of delivering the space demanded by a top UK retailer.”
Gazeley executive director Nigel Godfrey said: “The quality of the real estate proposition, together with Gazeley’s class leading delivery capability, ensured we secured our price expectations. Work has just commenced and almost 1m sq ft will be completed and handed over in less than six months from now.”
Cushman & Wakefield advised LGP, while JLL, Savills and Burbage Realty acted as joint agents for Gazeley.
chris.berkin@estatesgazette.com
