Stenprop has acquired a fully let industrial estate in Shrewsbury for £2.9 million in line with its stated strategy to focus on UK multi-let industrial (MLI) property. The purchase from South Street Capital reflects a net initial yield of 6.7%.
Greenwood Industrial Estate is located off Cartmel Drive in the primary industrial area of Shrewsbury, three miles north of the town centre. It comprises 30 units, totalling 44,611 sq ft of industrial space. The weighted average unexpired lease term is 3.7 years to lease expiries and 2.3 years to lease breaks. The average passing rent is £4.70/sq ft.
Julian Carey, Group Property Director of Stenprop, said: “Greenwood is a purpose-built estate with an attractive mix of small units and low average rents. It is located in an area with very strong supply-demand dynamics and a number of the tenants have been in occupation for more than 20 years.
“We intend to make improvements to the estate through a programme of capital expenditure, which, we believe, will provide scope for rental growth, while the acquisition price of £66/sq ft reflects a significant discount to replacement cost”.
The estate is the sixth acquired by Stenprop since its purchase of the Industrials.co.uk portfolio for £127 million in June 2017. Stenprop is seeking a further £100 million of multi-let industrial opportunities in the UK over the course of 2018.
Stenprop was represented by JLL and the vendor was represented by Knight Frank.