Warehouse REIT has acquired Phase 2 of Ventura Retail Park in Tamworth for £38.6m in a deal reflecting a net initial yield of 7.4%.
Phase 2 offers 120,000 sq ft of space across 13 units and is let to occupiers including Boots, Sports Direct and H&M. Contracted rent across the scheme is £3.1m and the WAULT is 6.4 years.
Ventura Retail Park comprises 700,000 sq ft of retail warehouse space in total and anchor occupiers include Next, Primark and Marks & Spencer.
Simon Hope, from Warehouse REIT’s investment adviser Tilstone Partners, said: “This was a rare opportunity to acquire an asset that will be earnings enhancing in year one. Retail warehousing is a sector where we have deep experience, and which plays to our strengths in multi-let asset management. Rents have rebased and are now starting to grow, while pricing remains attractive relative to equivalent assets on the multi-let industrial side, which should support earnings and help rebuild dividend cover – a key priority for this business.”
Warehouse REIT announced the acquisition as it unveiled its full-year results for the 12 months ended 31 March 2024. The REIT’s operating profit was up 8.7% to £35m in the reporting period and the value of its portfolio grew 2% on a like-for-like basis to £810.2m.
Neil Kirton, chairman of Warehouse REIT, said: “The standout feature of this year has been the resilience of the industrial occupational markets, reinforcing our conviction in the multi-let asset class and driving a 5.1% increase in like-for-like rental growth. This part of the market remains structurally under-supplied in terms of well-located, quality assets, supporting an increase in our valuation and enabling us to capture an uplift on previous rents of nearly 30%.
“We have continued to execute on our disposal strategy, with £165.2m of non-core assets sold since our disposal plan was announced in November 2022. This includes Barlborough Links, Chesterfield, a single-let asset which sold for £46m in June. Releasing capital from Radway Green in Crewe will complete that plan and negotiations are well advanced.
“This strong progress provides us with the flexibility to undertake selective value accretive acquisitions, and today we are pleased to announce the acquisition of part of the Ventura Retail Park in Tamworth for £38.6m, a retail warehousing asset which is highly complementary to our business and our skill set.”
