M7 Real Estate (“M7”), the pan European investor and asset manager, announces that it has acquired a single let industrial unit in Newton Aycliffe, County Durham for £1.37 million representing a net initial yield of 7% and a capital value of £23.32 psf.
The unit, which comprises 58,747 sq ft, is situated on Heighington Lane on a 7.76 acre site and is let to EOS Facades Limited on a 10 year lease expiring in 2027. The lease is subject to a RPI linked rent review in 2022 and generates a rental income of £102,000 per annum. In addition to the warehouse space the building offers ancillary office accommodation, which is currently unoccupied and will be refurbished and relaunched in Spring 2019 to meet the demand for larger floor plates on the estate. The property also includes 3.5 acres of development land.
The property is located on Aycliffe Business Park, the second largest industrial estate in the North East, which is predominantly occupied by businesses in the manufacturing sector. The total estate spans 988 acres and supports over 10,000 jobs. The estate has seen large take up of industrial space over the last five years and now faces a severe shortage of well specified industrial units.
The asset has been acquired on behalf of MOVVI, a separate account mandate for a private trust managed by M7, which was launched in 2015. This acquisition is in line with the fund’s strategy of investing in assets providing long term sustainable income, diversification of risk but also provides opportunity for value add through leasing of the vacant accommodation and development opportunities.
Victoria Lane, Asset Manager at M7, commented, “This is a really exciting complementary purchase for MOVVI that now own four assets across the UK. This industrial unit is well configured with excellent loading and circulation space which is highly sought after in this market. The value-add initiatives will commence immediately which will enable us to capture the latent demand for well specified space along the A1 corridor.”