12 Dec 2016

M7 revs up Aycliffe Business Park with new Gestamp Tallent lease

London, 12 December 2016 – M7 Real Estate, the pan-European investor and asset manager, announces on behalf of M7 REIP III that it has agreed a new 15 year lease and £1 million investment programme with the car parts manufacturer Gestamp Tallent at its property in Newton Aycliffe Business Park, the second largest industrial estate in the North East.

Gestamp Tallent has been a tenant of the 124,262 sq ft industrial asset at Aycliffe Business Park since 2014 and, following M7 REIP III’s acquisition of the property in October 2015, has agreed a restructured 15 year lease with a commencing rent of £310,000 per annum, which will rise to £373,000 per annum in 2019 and a further 8% every five years thereafter. Gestamp Tallent is a world leader in the design, development and manufacture of metal automotive components and specialises in developing innovative products to achieve increasingly safer and lighter vehicles, thereby reducing energy consumption and environmental impact.

As part of the lease negotiations, a £1 million capex programme for the further development and improvement of the property has also been agreed. M7 will undertake the investment at the existing factory to provide a new car park, hard standing areas and new aluminium plant, to facilitate Gestamp Tallent’s contract with Jaguar Land Rover.

M7 REIP III is a separate account, focused on smaller UK regional commercial real estate assets, with a total portfolio size of circa 342,000 sq ft across eight assets. The Fund has a value-add strategy and targets assets that offer both sustainable income streams and asset management opportunities in the retail, office and the multi-let industrial sectors in the UK.

John Murnaghan, Head of UK Real Estate at M7, said: “We acquired this industrial property having identified a number of opportunities to achieve significant rental uplift and drive value, including the fact that the supply of large space in Newton Aycliffe and the A1 corridor sits at an all-time low and the demand for such assets continues to outstrip supply. Since completing the acquisition we have been working closely with Gestamp Tallent to align our business objectives. As a result, we have agreed a strategic lease restructuring and investment programme in the asset which will provide a continually rising income stream over the next 15 years.”