UK Commercial Property REIT (UKCM), a fund managed and advised by Aberdeen Standard Investments, has acquired a portfolio of five distribution warehouses in the UK from Clipstone Logistics REIT for £85.4 mln (€95 mln).
The transaction volume reflects a headline net initial yield of 5.5%.
Comprising 909,030 ft2 (84,450 m2), the portfolio is 100% let to a range of tenants with an average headline rent of £5.52 per ft2, and an unexpired lease term of 7.4 years to break and 9.6 years to expiry. Tenants include Clipper Logistics, Roca Limited, Bestway Pharmacy NDC Limited, Rhenus Logistics Limited and TJX UK (owner of TK Maxx).
'As the structural changes from the widespread adoption of e-commerce in the UK pervade, a trend which has proven resilient against a backdrop of Brexit negotiations, we expect the outperformance of the logistics market to continue as occupier demand for space remains high,' said Will Fulton, lead manager of UKCM at Aberdeen Standard Investments.
Located in established industrial parks across the East and West Midlands, the assets are situated in Cannock, Derbyshire, Leicester, Stoke-on-Trent and Newcastle-Under-Lyme.
UKCM said the transaction increases the funds industrial exposure to 45% of the total portfolio value, with approximately 27% now comprising South East and London urban industrial assets, with 18% in strategic regional locations.
The acquisition was funded from existing cash resources, recycling capital from the disposal in October 2018 of lower yielding assets: a high street retail asset in Exeter for £23.5 mln and a London office at 15 Great Marlborough Street, for £73.2 mln.