Warehouse REIT has bought eight reversionary warehouse and distribution properties from Aviva Investors, for £70m.
The deal represented a net initial yield of just over 7%. An additional deferred payment of up to £5m is due on or before September 2023.
The portfolio, which produces an annual rent of £5.38m, comprises one multilet and seven single-let warehouses measuring a combined 995,106 sq ft.
Occupiers include Amazon, Iron Mountain, Direct Wines and Sytner Group. The portfolio contains a WAULT of circa 5.3 years and an average rent of £5.40 per sq ft.
The assets are located in Reading and Gloucester in the South; Coventry, Leicester and Nottingham in the Midlands; Grimsby and the Humber Docks in the North East; and Warrington in the North West.
It means more than 60% of the REIT’s income is being produced by assets in the Midlands and the South of England.
Meanwhile, Amazon has now become the REIT’s second-largest tenant, accounting for around 4.5% of total rent.
The Gloucester warehouse, which is let to Direct Wines, the trading name of the UK’s largest home-delivery wine merchant Laithwaites Wine, will become the company’s third largest income stream.
Following the deal, the REIT has now fully deployed the £120m of available firepower it had built up since undertaking a £76.5m capital raise in March.
Andrew Bird managing director of Tilstone, Warehouse REIT’s external manager, said: “The reversionary nature of the portfolio sits within some short leases and some below-market rents, however the quality of the assets and the strength of their locations give us confidence that we will be able to unlock value through active management.
“This transaction means that the company has now acquired 14 assets within six months, fully deploying the proceeds of our most recent fundraise.
“We continue to see attractive acquisition opportunities underpinned by solid occupation demand and remain focussed on the continued management of the company’s portfolio to drive future shareholder returns.”
Savills advised Warehouse REIT on the purchase.
To send feedback, e-mail pui-guan.man@egi.co.uk or tweet @PuiGuanM or @estatesgazette
