Aviva Investors has sold a 346,000 sq ft warehouse in Washington, Tyne and Wear, to a local government pension scheme for £50.15m, reflecting an initial yield of 6.8%.
The property, which was built in 2010 at Radial 64, sits on a circa 16.5-acre site and is let to BAE Systems on a 25-year full repairing and insuring lease from 2011, with a further 13 years remaining.
The current passing rent is £3.685m per annum and is subject to annual uplifts of 3%. The investment is a virtual freehold, being held on a 999-year ground lease from 2010, at a peppercorn annual rent.
Simon Beanland, principal at Avison Young, which represented Aviva Investors on the sale, said: “We were pleased with the outcome of this sale, following upon a best bids process. The property has made an excellent return for the client over the last 12 years. Timing-wise the disposal is in keeping with the fund’s strategy to sell out of relatively shorter let assets.”
