KFIM sells Sainsbury’s distribution centre to Aviva Investors on behalf of LB Asset Management

Knight Frank Investment Management has sold a Sainsbury’s distribution centre in Coleshill, Birmingham, to Aviva Investors for £138.65 million.

KFIM acquired the asset on behalf of LB Asset Management and their investors in 2017 and has asset managed the property during the hold period.

Totalling 783,674 sq ft, the property is located in Hams Hall Distribution Park, one of the UK’s premier logistics parks, situated within the “Golden Triangle”.

The park is 11 miles north east of Birmingham city centre with excellent access to the M6 toll and M42 motorways. Junction 9 of the M42 motorway is 5.6 miles away, Junction 19 of the M1 motorway is 29.2 miles and Junction 4 of the M5 is 22.4 miles.

The park benefits from the Intermodal Rail Freight Terminal, operated by Associated British Ports, which has a capacity for 60,000 TCU and Customs Clearance for European freight. The terminal connects with Southampton, Felixstowe and Ipswich as well as the Channel Tunnel, daily.

Alex Braithwaite, Senior Investment Manager, at KFIM said: “Hams Hall was the first asset that KFIM acquired on behalf of our Korean clients. At the time the shift to online grocery shopping was beginning to accelerate and our strategy was to target strategic distribution units such as this, which would become even more critical to supply and delivery operations. The sale of Hams Hall, which generated fierce competition between UK and international purchasers, clearly demonstrates the success of this strategy, delivering risk adjusted returns well in excess of the investors original target rates. Despite Covid, appetite from our Korean clients remain strong, and we continue to seek new opportunities on their behalf”

Will Gubb, Partner at Knight Frank, said: “The sale attracted significant interest from both domestic and overseas buyers. Investor demand is currently very strong for prime logistics assets with secure income profiles, such as this, and we believe this demand will continue throughout 2021.”

Kris McPhail, Director, Real Estate Long Income, at Aviva Investors, said: “We are pleased to add this distribution centre to our portfolio. With its strong location, this property is well-placed for national distribution whilst also being well-served by major international ports. Coupled with a high-quality and creditworthy tenant, it continues our strategy of seeking prime assets that we believe provide offer best relative value and can provide our investors with attractive levels of long-term, inflation-linked returns.”