Acting on behalf the InfraRed Urban Logistics Income Fund, InfraRed has bought the property, comprising six industrial units, from Network Space. Tony McDonough reports
Property investor InfraRed Capital Partners has completed the off-market acquisition of a 162,000 sq ft multi-let industrial scheme at Mere Grange in St Helens.
Acting on behalf the InfraRed Urban Logistics Income Fund, InfraRed has bought the property from Network Space for £17.6m reflecting a net initial yield of 5.50%.It comprises six new industrial units.
Construction of the estate was completed in 2019. It benefits from a weighted average lease length of more than 14 years and is currently let to five occupiers including a major international e-commerce retailer listed on the NYSE. 43% of the income is subject to index-linked rental increases.
Dean Harrison, investment director at InfraRed, said: “The asset’s proximity to Liverpool and Manchester and direct motorway access to the M62 positions it well for last mile delivery and urban servicing.
“The recent letting to a global e-commerce retailer is evidence of the asset’s attractiveness for such occupiers. The accelerated shift to e-commerce during recent months has increased demand for modern, high-quality urban logistics assets.
“ We are looking to expand our urban logistic holdings in the UK and Western Europe throughout 2020 and beyond; with substantial capital available for deployment.”
The acquisition marks the latest purchase for IULIF, which targets high-quality urban logistics assets located within a 20-minute drivetime of the UK’s top 10 city centres.
The fund is looking to capitalise on the growing imbalance between occupational supply and tenant demand for urban logistics assets, which is being driven by the rapid growth of e-commerce and ongoing urbanisation.
DTRE, Dentons and Malcolm Hollis acted for InfraRed. Network Space will continue to provide management services for the asset.