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Brixton has bought a new 133,000 sq ft distribution unit next to its existing site at Greenford Park in west London, according to the latest reports.
It took over the site from British Land in a deal reportedly worth £21 million, says Property Week. The commercial property is currently let to Kuehne & Nigel Drinkflow Logistics until 2022, with a surety from Scottish & Newcastle.
It is let out at £8.44 per sq ft, although a rent review is due at the end of this year.
"If you look at CBREs November Monthly Index they estimate that across the UK equivalent yields for distribution units have moved out by 65 bps since June to 5.65 per cent and prime London industrial stock (excluding Heathrow) has fallen back 25 bps to five per cent, the same as it was at the start of the year," said Tim Wheeler, Brixton chief executive.
"We believe that the market would have paid close to 4.75 per cent equivalent for this property in the summer and we see value enhancement here not least for its integration into our management regime. This is one of a number of investments that we are looking to acquire at what we see as a very interesting phase in the cycle".
The commericial property purchase represents a yield of 5.1 per cent at current rental rates.