Firm Yields Show Sector Remains In Good Order
Prime logistics yields for long-let assets with strong covenants remain firm, with little sign of outward movement. Examples include Super G Castleford, bought by Equites Property, and let to Puma on a 15 year lease, for £30.68m at a 4.60% NIY, and Warrington Council's purchase of a 377,000 sq ft unit in Haydock, let to Movianto for 10 years, for £45.3m, reflecting a 4.82% NIY.
The largest deal of Q3 was the purchase of three Eddie Stobart units at Panattoni Park, Northampton by Gazeley for £80.0m at a 4.91% NIY.
REITs and PropCos accounted for the highest share of investment in Q3, transacting £520m or 36% of the total volume.
While the MSCI Sept 2019 Index again showed a slowdown for UK Industrials, the sector is still outperforming. On an annualised basis, capital values grew by 3.9%, compared to a 2.3% fall for All Property. Similarly, rental growth for industrial rose by 3.6%, compared to 0.2% for All Property.