Lothian Pension Fund, advised by Savills, has acquired the freehold of the Riverside Cargo Centre on Mathisen Way in Poyle, Heathrow from Orchard Street Investment Management for £14.29 million, reflecting a net initial yield of 5.49%.
Set across 2.3 acres, the site comprises three warehouse units totalling 43,044 sq ft. The scheme is currently fully let to tenants including Amworld UK, Revisecatch and Kone with an unexpired lease term of 7.6 years. The property generates an annual passing rent of £836,665, reflecting a low rent of £19 per sq ft.
The units are situated in a prime location within the established Heathrow and West London industrial market and offer excellent access to J14 of the M25, J5 of the M4 and J2 of the M3.
Charlie Foster, Director, UK investment, comments: “The Riverside Cargo Centre provided Lothian Pension Fund with an excellent opportunity to acquire an industrial & logistics scheme in a key location with significant future asset management potential. Given the supply / demand imbalance in the wider market, we are likely to continue to see rental growth which should help to generate strong returns.”
Nicola Barrett from Lothian Pension Fund, adds: “Poyle is a prime last mile industrial hotspot, however the location continues to suffer from a chronic under supply of new and well specified units; which will stoke further rental growth in the market. Given the property’s attractive ESG credentials, along with the opportunity to further enhance these attributes over time, this investment will ultimately provide attractive longer term returns for Lothian Pension Fund. We are keen to continue to acquire similar assets across the south east and south west regions.”
Orchard Street Investment Management was advised by DTRE.
