4th Feb 2019 10:31
LONDON (Alliance News) - Warehouse REIT PLC said Monday it has acquired the air cargo centre at Glasgow International Airport for GBP11.1 million.
Warehouse REIT bought the 150,000 square foot estate from Airport Industrial Nominees Ltd on a net initial yield of 6.7% and a reversionary yield "in excess of" 7%. The landside property has a ground lease from Glasgow airport which expires in 2148.
The two-building centre has eight units leased across five different clients, including Nippon Express UK Ltd, PJH Group Ltd and Alpha LSG Ltd. The weighted-average lease term is 6.3 years, with the first break in 4.1 years.
Total passing rent stands at GBP788,086 per year, equivalent to less than GBP5.50 per square foot. Some units, however, are on rents as low as GBP5.06 per square foot, which provides the property with "significant near term opportunities to drive rental growth", Warehouse REIT said.
Warehouse REIT added that recent lettings in the immediate vicinity attracted rents of around GBP7.00 per square foot.
"The Air Cargo Centre in Glasgow is an exciting acquisition, highlighting our focus on buying well located warehouses close to important infrastructure hubs," Warehouse REIT investment manager Andrew Bird said. "There remains a constrained supply of airport related warehouses and yet the purchase continues to represent an investment value less than the cost of replacement. It is the belief of Tilstone that assets such as the Air Cargo Centre represent scarce commodities where rental growth will out-perform the wider market indices."
Shares in Warehouse REIT were 0.5% lower at 101.05 pence on Monday.
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