Total investment market activity fell back to £817m in 2023, down from £1.4bn in the previous 12 months with the largest deal over the year being the £56m purchase of Gunnels Wood Park in Stevenage by Westbrook Partners reflecting a net initial yield of 4.75%. The multi let park provides 334,670 sq ft of space across 41 units, the majority of which is income producing. Early indications show a slow start to the market in 2024 with relatively few transactions completing. The largest deal up to Q1 has been Ocado’s sale of its 38,700 sq ft East London site at 73 Chequers Lane Dagenham for £16m. The property was vacant at the time of the sale.
Prime industrial yields continued to drift out in the Eastern M25 market and now stand at 5.38% on average. Yields have increased by 44 basis points over the past 12 months and are now some 2.13% higher than the low point before this latest interest rate cycle. Over the same period 10 year gilt yields have risen by 2.29% and ended Q1 2024 at 3.96%. Prime yields in East London continue to be the sharpest across the region standing at 5.00%, whilst South East London & Kent yields are at 5.75%. Prime yields in North London & Herts and Essex ended Q1 at 5.25% and 5.50% respectively.
Waterglade Industrial Estate, West Thurrock – M&G Real Estate purchased the two units totalling 52,195 sq ft on Waterglade Industrial Estate in West Thurrock from CCLA Investment Management for £10.3m. The properties are fully let with leases due to expire in eight years. The net initial yield is estimated at circa 5.00%.
73 Chequers Lane, Dagenham – Ocado sold its 38,685 sq ft East London distribution unit at Chequers Lane Dagenham for £16m to Marwood Group. The building was vacant at the time of purchase and sits on a four acre site.
Gunnels Wood Park, Stevenage – Westbrook Partners purchased the 334,670 sq ft, 41 unit park from Universities Superannuation Scheme for £56m. The multi let scheme is almost fully let to 27 occupiers with tenants including the NHS, Euro Car Parts and the National Crime Agency. The purchase price reflects a net initial yield of 4.75%.
Belvedere Wharf, Belvedre – Tritax Big Box REIT purchased the 114,475 sq ft Belvedere Wharf for £27m from Savills Investment Management acting for Diagio Pension Fund. The two unit scheme, which completed in the latter months of 2021, was vacant at the time of purchase.
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