Warehouse REIT has exchanged contracts in its acquisition of a warehouse let to Amazon UK in Cheshire for £2.8m, reflecting a net initial yield of 7.3%.
Amazon UK Services is on a newly agreed five-year lease at the Widnes shed, which serves the online retailer’s last-mile distribution requirements across the surrounding North West region. These include distributing small items being offered for sale by “Amazon Sellers”.
Amazon is now the second-largest tenant on the REIT’s rent roll.
The asset is currently generating a comparatively discounted rental income of £216,432 pa (£4.42 per sq ft), while its low capital value of £56 per sq ft is less than the cost of replacement.
The 48,932 sq ft site has recently been refurbished and includes two-storey office accommodation and an electrically operated loading bay within a self-contained 2.5 acre site.
The warehouse is located at the Halebank Industrial Estate.
Andrew Bird, managing director of Tilstone Partners, which manages Warehouse REIT, said the deal enabled the landlord to “benefit from the yield arbitrage following recent disposals of lower-yielding assets”.
He added: “The North West industrial market continues to see record levels of both investor and tenant demand, driven by strong occupational dynamics, a shortage of new development and the continued regional growth of the online retail market.”
The vendor was represented by B8 Real Estate. Savills advised Warehouse REIT.
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Warehouse REIT has exchanged contracts in its acquisition of a warehouse let to Amazon UK in Cheshire for £2.8m, reflecting a net initial yield of 7.3%
