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Investment market transactions

Last year (2021) was a record year for investment market transactions in the Eastern M25 industrial market, with £2.35bn of deals completing and three transactions in excess of £100m being agreed.  The largest transaction was Valor Real Estate Partners purchase of 14 units on Gemini Park, Beckton totalling 300,000 sq ft for £155m, representing a net initial yield of 2.13%.  This was not Valor’s only purchase in the Eastern M25 market, with the company joint purchasing the 492,000 sq ft Carpetright Distribution Centre in Purfleet for £140m with Blackstone (NIY 3.09%), as well as buying a 38,000 sq ft scheme in SE15 for £16m.            

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Prime Investment Yields

Industrial prime yields across the Eastern M25 have continued to harden over the six months to Q1 2022, standing at 3.25% on average at the end of March 2022.  Transactions reached record levels in 2021 driving yields in East London and North London & Herts down to 3.00%, whilst Essex and South East London & Kent stand at 3.50%.  Activity has slowed in the first three months of 2022, due to lack of opportunities coming to the market.  Investor interest continues to be driven by the strong rental growth in the sector, with rental values growing by 28.7% over the 12 months to the end of Q1 2022 and 10.9% p.a. over the past five years.       

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Essex

Key Deal

Carpetright DC, Purfleet – Valor Real Estate Partners partnered with Blackstone Capital to purchase the 491,900 sq ft Carpetright Distribution Centre at Purfleet for £143m, with the purchase price representing a net initial yield of 3.09%.  The building is leased to Carpetright until 2032.         

Prime industrial yields Essex

East London

Key Deal

Gemini Park, Beckton  – Valor Real Estate Partners purchased 300,000 sq ft across 14 units on Gemini Business Park, Beckton for £155m from Aviva Investors.  The purchase price represents a net initial yield 2.13%.  Valor also consolidated its ownership by buying two further urban logistics units at the park from Compagnie du Parc in April 2022.        

Prime industrial yields East London

North London & Herts

Key Deal

Envoy 1371 Mollison Rd, Enfield – Blackrock UK property Fund purchased the 100,567 sq ft former Dreams distribution unit at Mollison Avenue, Enfield for £47.5m from LaSalle Investment Management.  The vacant building, which sits on a 6 acre site, is adjacent to another Blackrock ownership and presents the opportunity for redevelopment.                    

Prime industrial yields N London & Herts

SE London & Kent

Key Deal

VIP Industrial Estate, London SE7 – Greater London Industrial (GLI) a joint venture investment platform between Patrizia and Kingston Space property purchased the six acre VIP Industrial Estate in Charlton for £42m.  The previous owners had intended to redevelop the park for residential but planning was rejected.  The GLI platform will now be developed to provide urban logistics units to service the South East London market.   

Prime industrial yields SE London & Kent
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Key Contact

Philip Colman

Philip Colman

Divisional Director
020 3141 3520
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