SEGRO plc has acquired Electra Park, a 13 acre urban warehouse estate in Canning Town, London from Schroders for £133 million.
The estate is in a prime location, close to Canary Wharf and London City Airport as well as being bordered by the A12 and A13 main roads, connecting it directly to central London. It is also within walking distance of three Zone 2/3 London Underground stations allowing easy access for workers on the estate.
Electra Park provides 21,200 sq m of lettable space across 10 units of which nine are let, with the final unit currently under offer. The WAULT on the let space is 4.3 years to break and 6.4 years to expiry. The estate generates a topped-up passing rent of £3.4 million, reflecting a low average in-place rent of approximately £14 per square foot with an estimated ERV of £21 per square foot. Reflecting these low current rental levels and the potential of this unusually central location, the topped-up net initial yield upon acquisition is 2.3 per cent (rising to 2.6 per cent once the vacant unit, currently under discussion, is let) and the equivalent yield is 3.3 per cent.
Alan Holland, Business Unit Director for SEGRO’s Greater London portfolio, said: “This acquisition is an exciting opportunity for SEGRO to consolidate its leading London footprint and is a strong fit with its well established prime urban warehouse portfolio. Situated on the edge of Zone 2, at the gateway between Central London and the rest of our East London assets, it is in an area that is currently undergoing significant redevelopment and modernisation. This should further improve the already attractive supply/ demand dynamics and create the potential for strong rental growth, as we have seen happen in other inner London markets.
Electra Park helps us to build further scale in an area where we have made great progress through the East Plus partnership in conjunction with the Greater London Authority. This enables us to improve choice and provide an excellent customer experience as well as represents an opportunity for us to create value by applying our asset management expertise and knowledge of the local market.”
SEGRO was advised by JLL, Schroders were advised by Gerald Eve.