Paloma Capital, on behalf of Paloma Real Estate Fund I, has acquired two industrial estates in Gloucester and Redditch for a combined £16 million, reflecting an initial yield of 8%.
In Gloucester, Paloma has acquired the DHL Tradeteam facility on Eastern Avenue opposite Metz Way Retail Park from a private property company for just over £6 million. Alder King and Morgan Williams acted for the vendor.
The site extends to 11 acres and includes 150,000 sq ft of existing warehousing as well as 6.5 acres of secure yardage. The entire site is let to DHL Tradeteam until August 2017 at a rent of £550,000 per annum.
The site has an existing planning consent for a large format retail warehouse. However Paloma intends to retain and comprehensively refurbish the existing buildings for industrial and trade counter uses whilst identifying occupiers for the high profile 6.5 acres of development land that fronts the junction of Eastern Avenue and Metz Way. Paloma has appointed Midlands-based developer Chase Commercial to assist with the master planning design and project management of the scheme. Alder King and Savills have been retained as letting agents.
Julian Meredith, Director of Chase Commercial Ltd, said: “This high profile site is centrally positioned within Gloucester’s prime out of town roadside location and offers excellent refurbishment and repositioning potential. It is an exciting project to be working on as the site offers great potential for a variety of different occupiers and users”
Adrian Rowley, partner at Alder King’s Gloucester office, said: “Refurbishment of the existing warehouse space on this site, together with proposed new development, will be welcome news for the city. The market has seen record demand but limited supply, particularly for quality industrial space.”
In a separate transaction in nearby Redditch, Paloma has acquired the Manorside Industrial Estate at North Moons Moat for a price of £9.6 million; an initial yield of 7.6%. The estate extends to 187,000 sq ft in 30 units and is let to 22 tenants. The passing rents average is £4.65 per sq ft and there is a 12% current vacancy rate. FSP acted for the vendor whilst CBRE acted for Paloma.
Joe Froud, Partner of Paloma Capital, said “Both of these new assets are located in areas of under supply and are well suited to our style of active investing.”