Stenprop, the UK multi-let industrial (“MLI”) property company, has acquired three multi-let estates as it remains on target to be a fully focused MLI REIT by the end of the next financial year. The three in Newcastle, Bromborough and Bradford, have been purchased in separate transactions for a total consideration of £18.4 million, reflecting a net initial yield of 6.7% and a capital value of £99 per sq ft. It brings the total number of MLI acquisitions since 30 September 2020 to eight for an aggregate value of £44.2 million.
Located three miles from Newcastle City Centre, Stenprop has acquired Riverside Industrial Estate for £10.9 million from Aegon. Comprising 14 units across four terraces and two detached units, the property is let to a diverse occupier base spanning distribution, construction and trade counter uses. It currently generates a total annual passing rent of £784,660, equating to a low average rent of £6.40 per sq ft on occupied units. There are two vacant units which are already generating strong interest from potential occupiers. The acquisition grows Stenprop’s portfolio in the North East, a market characterised by record take up in 2020 which has resulted in constrained supply, following the acquisition of Mandale Business Park in Durham in November 2020 for £11.2 million.
Lake Enterprise Centre in Bromborough has been acquired in an off-market transaction for £4.15 million. The estate, which is 94% occupied and generates a passing rent of £296,000 per annum, is strategically located immediately adjacent to an existing holding, in a market characterised by a strong level of demand offering scope for future rental growth.
In a third, off-market, transaction, Stenprop has acquired Enterprise 5 in Bradford for £3.37 million. Comprising 17 units, the estate is currently fully-let with a passing rent of £234,000 per annum. The well-located property has a strong letting history and its location in a densely populated urban area is expected to underpin continued high levels of occupancy and generate strong future rental growth.
With these acquisitions, and following the completion of Stenprop’s German retail centre asset sales, which have already exchanged and are expected to complete soon, Stenprop’s MLI portfolio will account for 73% of total assets, as it remains on track to be 100% MLI by the end of the next financial year.