LONDON: Urban Logistics, the specialist UK industrial and logistics REIT, announced three acquisitions for a total consideration of £36.8 million in Colchester, Exeter and Nottingham and the signing of a new £151 million loan facility.

Colchester: On 10 July 2020, the Company acquired Interchange Park, located on the A12 / A120 in Essex, for £9.8 million. This well-located logistics park comprises five units with an average passing rent of £2.49 per sq ft. Local logistics rents are now achieving pricing levels of £7.00 per sq ft. Commencing later this year, the existing units will undergo an extensive £2.0 million refurbishment to create a modern, prime distribution centre serving the south east. The site benefits from a new road junction and infrastructure improvements which include a 10,000-unit housing development nearby. The acquisition includes an additional 7 acres of land to the north east of Interchange Park which, subject to planning, will be allocated to the development of a further three units.

Exeter: The Company has entered into a commitment to acquire a 6-acre development site at Exeter Gateway near junction 29 of the M5 motorway. At completion the development will be pre-let to Amazon and is an expansion to the tenant’s existing parcel distribution facility. Urban Logistics will fund the project to a total cost of £8.5 million with practical completion of the development expected in October 2020.

The Company has also acquired an adjoining site, also of 6 acres, which is conditionally pre-let to DHL and will be its local parcel sorting centre with a low site cover and dual service yards. This £11.2 million development site is due for practical completion by February 2022. It is envisaged DHL will sign a 15-year lease with five-yearly upward only rent reviews.

This opportunity came about as a result of the developer losing a Local Authority funding partner due to Covid-19. The forward funding represents a discounted entry point at a 5.3% NIY in a location known for its constrained supply of logistics facilities. It will create a prime urban logistics park with the potential to own further warehouses developed on the remaining adjacent land.

Nottingham: On 6 August 2020, the Company acquired a high-quality modern 75,059 sq ft warehouse for £7.3 million from M&G Real Estate at 5.6% NIY. The unit is let to Health Stores, a distributor of natural and organic produce, at £5.85 per sq ft through to 2026 and has an outstanding upward only rent review. It serves as a regional distribution hub and is prominently located close to the M1 motorway.

New Loan Facility: On 7 August 2020, the Company entered into a new £151 million loan facility with Barclays, Santander and Lloyds, to replace the existing loan facility totalling £76 million, which was due to expire in 2022. This new facility provides a three-year term and includes an option to extend for a further two-years. The additional funds available to the Company will be used for future asset purchases.

Richard Moffitt, Chief Executive, commented: “Logistics real estate has continued to perform well as the structural shift towards e-commerce accelerates, reaching a new high of 31% of all retail sales in April. The pandemic has also demonstrated a requirement for more buffer in global supply chains, a positive sign for warehouse demand.

“The acquisitions we have announced today were sourced off-market and are firmly in line with our investment strategy of focusing on logistics properties adjacent to urban areas that warehouse essential goods and consumer staples.

“We have now invested all the proceeds from our March capital raise and the new loan facility enables us to continue to acquire assets in our growing high-quality pipeline in accordance with our strategy in the coming months.”