Investment market transactions in the Eastern M25 industrial market totalled just under £650m in the first three quarters of 2024, with full year activity expected to surpass last years figure of £817m. The largest deal in the year to date has been the £54m purchase of The Delta Group building at Waltham Abbey, where Tritax Big Box and abrdn bought the 189,635 sq ft facility. The purchase price represented a net initial yield of 4.82%. Other major transactions included the purchase of the data centre Cloud House in Docklands by CBRE Investors for £48.7m (net initial yield of 5.50%) and Bloom Urban Warehouse/TPG Angelo Gordon’s purchase of Poplar Business Park for £21.5m (net initial yield of 4.91%).
Average prime industrial yields edged back in across the Eastern M25 region, falling to 5.13% at the end of Q3 2024, following the slight softening seen in the first three months of the year. The most significant move over the year to date has been the 25 bp improvement in yields in Essex, which now stand at 5.25%. Prime yields in East London remain the lowest across the region, standing at 4.75%, despite the increase in supply in this region. Investor interest is showing signs of improving, with a number of larger deals completing at yields between 4.75%-5.50%. The interest rate outlook now appear to be more positive, with 10 year gilt yields remaining around 4.00-4.25% and indications that base rates should reduce further.
Unit 4 Horizon 120, Braintree – Leftfield Property have acquired the 137,870 sq ft hi-tech industrial Unit 4 at Horizon 120 in Braintree from abrdn for £23m. The unit is wholly let to British Offsite, a subsidiary of Weston Group for a remaining term of 24 years at a current rent of £8.78psf. The purchase price reflects a net initial yield of 4.92%.
Poplar Business Park, London E14 – Bloom Urban Warehouses partnered with TPG Angelo Gordon to purchase the 75,345 sq ft multi let Poplar Business Park from Workspace Group for £21.5m. Bloom/TPG Angelo Gordon intend to refurbish the 21 unit park to improve ESG credentials. The purchase price represents a net initial yield 4.91%.
D25, Lea Road, Waltham Abbey – a joint venture between Tritax Big Box and abrdn purchased the 189,635 sq ft D25 unit at Lea Road Waltham Abbey from SEGRO for £54m. The facility is fully let to printing and creative agency The Delta Group at a rent equating to £14.67psf. The purchase price reflects a net initial yield of 4.82%.
Kent Space Portfolio – Hines European Real Estate Partners purchased a three property portfolio from Kent Space for £30m. The portfolio consists of properties in Ashford, Chatham and Ebbsfleet, with 78,000 sq ft of self storage space and 30,000 sq ft of office space. The purchase price reflected a net initial yield of 5.50%.
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