Real estate investment trust acquires Bradford logistics warehouse for £4.95m

A logistics warehouse in Bradford has been acquired by AEW UK REIT plc in a £4.95m deal.

The purchase by AEW UK REIT, which owns a portfolio of 28 regional UK commercial property assets, reflects a Net Initial Yield of 8.1%, reversionary yield of 8.9% and a capital value of £34 per sq ft.

The warehouse, which is located on the Euroway Trading Estate in Bradford, is let to Advanced Supply Chain on an eight year lease, at a low passing rent of £2.98 per sq ft.

The site is located near Junction 2 of the M606 and is close to the major conurbations of both Leeds (17km) and Manchester (60km), while also providing good access to the M1 servicing Birmingham and London, as well as the A1 north.

Among the distribution operators located on the Euroway Estate, include Marks and Spencer, whose 1.1 million sq ft regional distribution warehouse facility is located directly adjacent to the newly acquired asset.

Alex Short, REIT portfolio manager at AEW UK Investment Management LLP, said: “The acquisition of this well located logistics asset, on an attractive yield, is underpinned by the rapid growth we are seeing in online retail, which is leading to an increased occupier demand for logistics warehousing.

“The current low level of rent offers significant upside potential and we believe that that the acquisition pricing is well supported by the asset’s underlying vacant possession value, while fitting with our stated strategy of acquiring higher-yielding, income producing assets that offer asset management and rental growth opportunities.”

Following the acquisition, the company has invested a total of £128m across 28 regional commercial property assets and has a £9.33m investment in AEW UK’s Core Property Fund.