Royal Mail’s only distribution centre in Scotland has changed hands in an £8.76-million deal, brokered by Knight Frank.
The unit, located on Netherton Industrial Estate in Wishaw, has been purchased by a UK-based private investor. Its previous owner was another private investor and the transaction represents a net initial yield of 5.75%.
Consisting of 112,127 sq. ft., the Royal Mail distribution centre has a dedicated loading dock rail platform connected to the west coast express line. The modern industrial shed also features 12 dock loading doors and was built with a steel frame.
Scotland’s industrial investment market has seen strong levels of interest in the past 18 months, driven by a shortage of supply, tenant demand, and a lack of new development in recent years.
Knight Frank’s Logistics and Industrial Commentary (LOGIC) report for the first half of 2017 found that investment had increased by 54% on the previous six months, up to £88 million from £57 million.
Douglas Binnie, Associate at Knight Frank, said: “There’s an insatiable appetite from investors for industrial property in Scotland. The growth of online shopping and the lack of new industrial space is combining to create a booming market – yields continue to sharpen and valuations are rising. While returns in Scotland are catching up with England it still offers a relative discount, which is attracting investment.
“Interest is also extending beyond the traditional prime locations in the West of Scotland, Eurocentral and Cambuslang, to areas that would usually be considered secondary. The Royal Mail distribution hub in Wishaw is a great example of this trend in action, selling for more than £1 million above its asking price and at a yield 100 basis points lower – testament to the current strength of the market.”