M7 Real Estate (“M7”) the pan-European investor and asset manager has, on behalf of a major fund, secured two new lettings at Treforest Industrial Estate (“Treforest”), which is now fully let. Treforest is well known as one of the largest industrial estates in Wales with over three million square feet of lettable space on a site of more than 200 acres. Following the vacation of Unit D8.3, which extends to 23,000 sq ft and is situated on Main Avenue the primary thoroughfare within the Estate, it has been let to an existing tenant on the Estate, Flocon Limited (“Flocon”). Flocon took the opportunity to expand its presence at Treforest by taking a new 15 year lease with ten year term certain from June 2019 at a rent of £6.25 psf.
Following Flocon’s departure from Unit TP3, terms have subsequently been agreed with AFP for the letting of the 4,000 sq ft unit. Making their debut on the estate, AFP took occupation in September 2019 on a new ten year lease with five year terms certain at a rent of £8.50 psf. Both deals were materially above business plan and are indicative of the strong property fundamentals of Treforest and the urban logistics sector.
Through proactive marketing and taking advantage of the established occupier base within the estate, M7 have minimised void periods following lease expiry and improved rental values. The series of transactions highlight the domino effect of a lease expiry to drive rental tone and increase term certain. Both terraces in which the subject units are located traditionally have low tenant turnover and as such, the vacation of Unit D8.3 has generated some welcome evidence which will benefit future transactions on c. 90,000 sq ft of adjacent units.
James Nicholas Asset Manager at M7 commented: “Treforest Industrial Estate is an established industrial location with limited voids and low tenant turnover. The short period of vacancy and our ability to deliver new lettings demonstrates the strength of the local market for good space with rents continuing to improve. Our continued investment further demonstrates the confidence M7 has in the Estate.”