Far from a lack of demand, a key factor behind the slowdown in Q2 volumes has been a lack of suitable investment opportunities. This demand-supply imbalance was compounded by the insertion of material uncertainty clauses in valuations, resulting in many open-ended funds suspending trading for two months.
With evidence of pricing and rental income holding up, the RICS has since advised these clauses be lifted for industrial & logistics assets in a move that will encourage parties to return to a market that continues to see lots of appetite.
There has been an uptick in openly-marketed assets in recent weeks. Most notably Prologis's £435m Platform portfolio, which has no shortage of interest, with this deal poised to become the UK's largest ever sale of standalone warehouses.
This is another major statement of confidence in the sector, following hot on the heels of SEGRO's £202.5m purchase of Perivale Park in West London, at a NIY of 3.12% and a substantial uplift on the £160m guide price.
The asset was withdrawn from the market in March, so the fact that SEGRO renewed its bid in June on similar terms offers key evidence that pricing for prime assets remains firm. See overleaf for our deals table.
Date
Property
Size (sq ft)
Tenant
Lease Term (break)
Rent p.a. (£psf)
Price
NIY
Purchaser
Apr 20
Next S&LB (3 distribution assets)
1,216,023
Next Plc
26.0 yrs
£5,768,635 (£4.74)
£119.00m
4.54% (CPI 1-4%)
Aviva Investors
Units A&B, Ripple Road, Barking
63,918
Saint-Gobain
4.25 yrs
£630,695 (£9.93)
£18.20m
3.25% (OMV)
Blackstone
Jun 20
Grove Park 1&2, Thorpe Way, Leicester
178,079
Topps Tiles
20.0 yrs (10)
£1,185,000 (£6.65)
£18.10m
6.15% (RPI 1-3%)
Ares
Stratton Business Park, Biggleswade
115,952
CEF
22.0 yrs
£782,676 (£6.75)
£17.67m
4.15% (RPI up to 4%)
Aberdeen Standard
Argall Avenue, Leyton
32,000
Ocado
8.0 yrs
£436,151 (£13.63)
£10.90m
3.75%
LondonMetric
No of units (Tenants)
AWULT to Expiry (Break)
Seacroft Industrial & Trade Park, Leeds
114,817
14
4.2 (2.3)
£624,610 (£5.54)
£9.54m
6.23%
Perivale Park, Greenford
578,305
23 (21)
5.5 (3.4)
£6,756,391 (£10.03)
£202.50m
3.12%
SEGRO
Vaughan Park, Tipton
81,198
5 (4)
7.2 (4.4)
£562,502 (£6.93)
£9.17m
5.75%
LSH IM
Quarry Wood, Aylesford
465,000
27 (19)
3.0
£2,300,000 (£4.94)
£37.30m
5.78%
Patrizia
Queens Court, Nottingham
50,590
8 (6)
5.0 (4.3)
£400,559 (£7.92)
£6.00m
6.21%
Private Investor