Warehouse REIT buys Glasgow Airport warehouse estate

Urban and ‘last-mile’ industrial asset investor Warehouse REIT announced the acquisition of a multi-let warehouse estate on the Glasgow Airport Business Park in Glasgow on Tuesday, totalling 55,600 square feet.

The AIM-traded real estate investment trust said the purchase price of £5.3m reflected a net initial yield of 6.3%.

It said the three units, which ranged from 16,500 to 21,600 square feet, were occupied by two transport, logistics and delivery companies and a craft beer distributor.

The property generated a net rental income of £0.36m per annum, equating to a low average passing rent of £6.40 per square foot, and provided a weighted average unexpired lease term of over four years to expiry.

It described the Glasgow Airport Business Park as a “prominent” business location adjacent to Glasgow Airport, about nine miles west of the city centre.

Occupiers benefited from “strong” local and global transport links, the board said, including air, rail, bus and road networks.

The business park was located within one minute's drive of the M8 motorway, Scotland's busiest arterial route, and would also benefit from the development of the proposed Glasgow Airport Tram Link.

On 5 February, Warehouse REIT announced it had successfully raised £45.9m by way of a placing to fund a near-term pipeline of acquisitions.

Its acquisition on Tuesday followed the previously-announced £14m acquisition of two distribution warehouses in Harlow and a £35m warehouse estate in Liverpool, and marked the successful deployment of £57.4m including costs, to give a blended net initial yield of 6.3%.

“Glasgow is one of the UK's most dynamic cities, with a growing workforce,” said Andrew Bird, managing director of Warehouse REIT’s investment advisor, Tilstone Partners.

“Given ongoing e-commerce demands and a vibrant occupational market, it is forecast to see strong levels of warehouse investment activity and rental growth.”

Bird said the business park occupied a “highly sought-after” position, and furthered the company's exposure in a key market while adding three strong covenants to the tenant roster.

“Whilst the company has now completed on its near-term pipeline identified as part of the recent successful placing, thereby deploying all of the equity raised, it continues to source attractive opportunities in line with its ambition to continue scaling and diversifying the portfolio, utilising the agreed revolving credit facility.”

At 1205 GMT, shares in Warehouse REIT were down 0.78% at 126.5p.