The Royal London Pension Property Fund has acquired The Birches Trading Estate in East Grinstead, West Sussex, for around £65m from Ropemaker Properties.
The Birches comprises 384,000 sq ft of multi-let trade counter, logistics and light industrial space situated on a site of 24 acres. The estate is located to the north of the town and is the principle industrial area in East Grinstead.
The scheme is home to 26 tenants including Screwfix, Travis Perkins, DHL and International Logistics.
Rents range from £6.25 to £10.50 per sq ft, and offer good rental growth potential when compared to nearby Crawley where rents are approaching £14 per sq ft. The initial yield is 4.66% and the estate offers short term reversionary potential to increase the yield in the next 12 months.
Paul Griffiths, Senior Director at BNP Paribas Real Estate, which acted for the buyer, commented: “It is very rare in the current market to acquire an un-broken industrial estate in the South East of this capital lot size that provides a variety of unit sizes to meet occupier requirements, from trade counters to last-mile logistics.
“The investment provides the opportunity to benefit from the strong rental growth currently being experienced in the Gatwick area. We were delighted to secure the investment where there was strong bidding from institutions looking to increase their weightings in the South East industrial sector.”
Andrew Johnston, Fund Manager at Royal London Asset Management, commented: ‘We were delighted to secure this industrial estate against strong competition. It affords multiple asset management opportunities and we’re confident that it will deliver strong returns for the Fund. We continue to seek further quality industrial investment opportunities following an active 2017 in the sector.’
AHBN LLP acted for Ropemaker Properties on the sale; Royal London was advised by BNP Paribas Real Estate.
