16 Oct 2018
M7 acquires long let Eddie Stobart distribution warehouse asset at a 10% net initial yield
London, 16 October 2018 – M7 Real Estate (“M7”), the pan-European investor and asset manager, announces that it has acquired, on behalf of M7 Real Estate Investment Partners VI (“M7 REIP VI” or the “Fund”), five adjacent warehouse units let on a long term lease to Eddie Stobart Ltd (”Eddie Stobart”) in Workington, Cumbria for £6.295 million, representing a net initial yield of 10% and a capital value per sq ft of £13.22. The asset has been acquired from.the Stobart Group.
The units, four of which are interlinked, are situated on the established 45 acre Lillyhall Industrial Estate and comprise a total of 476,000 sq ft. Four of the units are occupied by Eddie Stobart on a 10 year lease without break. The lease was successfully renewed in March 2018 and is subject to RPI linked rent reviews at years two and seven. The total units are let at £1.31 per sq ft and generate a total rental income of £675,000 per annum.
In addition to warehouse space, the buildings provide some additional external office space, a series of level loading doors across all the units and significant parking provision. The site also includes adjacent underutilised land with potential for future development.
M7 REIP VI invests in mixed-use assets across England and Scotland. This transaction follows the acquisition of three new mixed-use assets for the Fund in August 2018 and M7’s strategy remains to expand the Fund’s portfolio further.
Will Mitchell, Asset Manager at M7, commented “The fundamentals of this asset, including the fact that it is located on an established long let industrial estate and offers an attractive day one yield with scope to add value, make it a perfect fit with the M7 REIP VI strategy. The continual reduction in the supply of large industrial space, coupled with an increase in demand for accommodation such as this, is supporting positive rental growth and we anticipate this to be realised going forward. It was a pleasure dealing with Roebuck Asset Management on this transaction which has no doubt added to our successful working history.”
Charlie Seaton, Director of Roebuck Asset Management, commented “Having completed a range of initiatives at the property, it was an optimal time to sell. We were delighted to work with the M7 team again on another successful transaction.”
M7 Real Estate were unrepresented. Roebuck Asset Management acted for Stobart Group.