AEW UK REIT plc (“the Company”) has announced that it has acquired an industrial asset, Lockwood Court, Parkside Industrial Estate in Leeds for a gross purchase price of £7.3m, reflecting an attractive initial yield of 7.7%.
The 187,794 sq ft warehouse asset is fully let to LWS Yorkshire Ltd, a logistics and storage provider for Harrogate Spring Water, on a 10 year lease from October 2018. The lease provides a low passing rent of £3.22 per sq ft which, together with tight supply, forms a strong base for future potential rental growth.
Located two miles south of Leeds City Centre and close to J25 of the M62 and J40 of the M1, Parkside Industrial Estate is a well-established industrial and commercial area with a history of attracting regional and national occupiers.
Alex Short, Portfolio Manager, AEW UK REIT, commented: “This latest acquisition is a very attractive addition to the portfolio due to both its high income return and potential for value growth in the future. Offering a low passing rent and located in an area of high tenant demand with limited property supply, the asset fundamentals mirror those of the portfolio’s strongest performing industrials from which we saw capital value growth of 2.8% during Q4 last year alone. These low rented industrial assets now make up over 45% of the portfolios holdings.”
Following the acquisition of this property the Company’s borrowings now show a gross loan to value of 25.0%. The Company’s holdings comprise a diversified portfolio of regional UK commercial property assets showing exposure to the major property sectors in line with the weightings shown below. As per the Company’s Investment Restrictions, maximum exposure to any of the below sectors at the time of purchase is 50%.