Monday, November 11, 2013

News: Dearne deals done as Yorkshire's investment peaks

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The sale of the massive Next distribution centre in Manvers, Rotherham for £86.68m took the total invested in commercial property in Yorkshire for the year-to-date to £727m; the highest cumulative total since 2010.

Research by commercial property consultants, Lambert Smith Hampton showed that a total of £301m was invested in the third quarter of 2013. This is almost 10% down on the previous quarter but took the total for the year-to-date to £727m; a 21% increase compared with the same period in 2012.

For the first time in over two years, the industrial and distribution sector was the region's most heavily invested asset class, with transactions totalling £157m. Boosted by Legal & General's acquisition of two distribution units at Brookfields Park in Rotherham for £86.6m, the sector accounted for 52% of the region's total investment activity.

Investment fund managers, Tritax sold the two units at Brookfield's Park, which total 1.1m sq ft, and secured a yield of 5.5%.

Developed by St Paul's Developments and opened in 2008, the Rotherham operation is home to around 450 employees. The two buildings can handle 110,000 pallets and includes the largest warehouse in Next's 13-site distribution network that handles a total 315 million units each year. The network makes 88,000 deliveries every year to 500 Next stores across the UK and 2.6 million active internet and Next Directory catalogue customers.

The sale followed from a previous deal which saw an unnamed UK investor purchase Maplin's head office and distribution warehouse, also at Brookfields Park, for £11.5m, boosting the figure for the second quarter to £334m.

Abid Jaffry, regional director of capital markets at LSH, said: "Activity levels across all main sectors in the market look very positive going forward. We have experienced considerable interest in assets we have marketed, to a point where we are now seeing highly competitive situations with a number of investors. This is beginning to drive pricing levels higher – a situation we have not seen on a consistent basis for some time.

"The volume of money in the market suggests that we will continue to see more transactional activity where pricing levels are beginning to exceed historic book values."

Lambert Smith Hampton website

Images: LSH

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