Warehouse REIT buys four occupied Liverpool units

The AIM-traded commercial real estate investment trust said the purchase price of £35m reflected a net initial yield of 5.5%.

Ranging from 74,000 to 163,000 square feet, it said the units were occupied by three separate occupiers spanning the automotive and pharmaceutical sectors.

The properties generate a net rental income of £2.1m per year, equating to a low average rent of £5.31 per square foot, and provided a weighted average unexpired lease term of more than seven years.

Warehouse REIT described Boulevard Industry Park as one of Liverpool's most successful and popular business locations, adjacent to Jaguar Land Rover's 300-acre Halewood manufacturing plant and major AstraZeneca and Seqirus facilities.

It said occupiers benefited from the asset's “prominent location” fronting onto Speke Boulevard (A561), the primary southern route into Liverpool’s city centre which is seven miles to the north west.

It also provides access onto the M57 and M62 motorways, and has close proximity to Liverpool John Lennon Airport.

On 5 February, Warehouse REIT raised £45.9m in a placing, to fund a near-term pipeline of acquisitions.

Alongside the previously-announced £14m acquisition of two distribution warehouses in Harlow, the board said the Liverpool transaction substantially deployed the proceeds of the placing, and took the company’s portfolio past eight million square feet.

“The north west is one of the UK's most dynamic regions from both a population and employment perspective, and the significant infrastructure investments made and ongoing is putting the availability of modern, urban warehouse space under severe pressure,” said Andrew Bird, managing director of Warehouse REIT’s investment advisor, Tilstone Partners.

“Despite this, there are a number of pockets where average rents have yet to catch up with the rest of the market, and having acquired a number of assets at and since IPO, the company now benefits from a strong weighting in the region.”

Bird said the transaction marked “significant progress” delivering on the agreed pipeline, with the firm having now deployed most of the equity raised at the recent placing.

“We are grateful for the support of shareholders and, utilising the agreed revolving credit facility, the company has remaining firepower of £50m, allowing it to continue to source and execute on attractive opportunities as it focuses on growing and diversifying the portfolio, whilst improving both the contracted income and reversion potential.”

At 0946 GMT, shares in Warehouse REIT were up 0.39% at 127.5p.