While Arrow Capital Partners has agreed the forward funding of a large logistics building in UK Midlands town Corby, a deal reportedly worth around £20 million, LondonMetric Property has disposed of a portfolio of six UK distribution buildings for £57.3 million.
The deals serve to further emphasise that market perceptions tend to favour the logistics sector at present while question marks hang over the offices and retail sectors.
LondonMetric CEO Andrew Jones commented: “The attractive demand: supply dynamics in distribution and the increasing weakness in legacy sectors is attracting substantial capital into the logistics sector from both new and existing investors.”
The LondonMetric portfolio was sold to Canmoor and Canadian institutional investor, AIMCo, and reflected a blended net initial yield of 5.3%.
The portfolio, which had been acquired over a number of years, is located in the mainly Midlands towns of Worcester, Leamington Spa, Royston, Castle Donnington, Milton Keynes and Huyton. Most of the buildings were constructed in the 1990s and LondonMetric said its disposal will crystallise an £8.8 million profit on cost and an ungeared IRR of 11% pa.
Meanwhile, Arrow Capital Partners, which invests in property in Europe and Asia-Pacific, is to buy and forward fund the development of the 248,000-sq ft Corby 248 on the Midlands Logistics Park. The project is a joint venture between Mulberry Developments and Frogmore and is their fourth sale on the Park. Previously, buildings have been let to Bosch (946,000 sq ft), Stobart (844,000 sq ft) and Europa (525,000 sq ft).
Arrow has acquired the scheme for its €3bn Strategic Industrial Real Estate (SIRE) platform. Mulberry has been retained to develop unit which will be available for occupancy in April 2021.
Arrow’s head of investment management Europe Katherine Parker said the deal continues SIRE’s investment in industrial and logistics assets, “which are benefiting from the acceleration in online retail.”