Trio of UK logistics sites snapped up by BMO

Canadian investment firm BMO has bought three logistics assets on behalf of a UK segregated mandate client.

Warehouses worth £33m have been acquired in Ipswich, Birmingham and South Derbyshire.

Following the sale of the Royal Mail distribution centre in Bristol, the transactions form part of BMO’s strategy for its client to diversify out of larger and older distribution centres into modern and strategically located logistics facilities in areas of strong demand across the UK.

Matthew Howard, Fund Manager at BMO REP, said: “Our objective for the client has been to recycle the proceeds of recent sales into a diversified pool of modern logistics facilities in well-connected strategic locations with sound economic drivers. We are delighted to have continued this programme with the purchases in Ipswich, Birmingham and Swadlincote.

“We continue to have strong conviction in the industrial sector, and we believe these well-located modern facilities with attractive lease terms will provide accretive risk-adjusted returns for our client.”

The first transaction is a £11.6m (net initial yield 4.5%), forward commitment for an 80,000 sqft logistics warehouse on the Futura Park commercial district in Ipswich. The property is pre-let to Hubbard Products Limited (guaranteed by Daikin Europe NV), a leading air conditioning manufacturer, on a 20-year lease.

The second transaction represents a £11m outlay (4.6%) on a 56,800 sqft logistics warehouse in Aston within the Advanced Manufacturing Hub. The asset, which is due for completion in July 2021, is fully pre-let to Truflo Marine Limited on a 15-year lease with a break at 10 years.

The third is the £10.3m acquisition (5.4%) of an up and built modern mid-box industrial warehouse estate. The units are let to three separate tenants on an average WAULT of 10.9 years. The asset sits within a modern business park located to the west of Swadlincote town centre.