The Radway Green Small Arms Ammunitions facility is to be offered to the commercial investment market by the current owner for £49.7m, representing a net initial yield of 5.5%.
The plant was redeveloped in 2011 for BAE at a cost of £83m. The site has been used for bullet production for 75 years, mainly for the British Army, and is capable of manufacturing 1 million small-arms bullets a day.
GVA has been appointed to manage the sale.
Formerly a Royal Ordnance factory, the 254,000 sq ft site was acquired by BAE Systems in 1987, and it has continued production of bullets and other munitions since.
The facility is let to BAE Systems until 2036, at a current rent of £2.9m a year with the rent rising every year.
Additionally, BAE Systems currently has a 15-year contract with the UK Ministry of Defence, guaranteeing production at the site until 2023.
- Comment below made by BAE Systems on 16 October 2014
Proposed land sale at Radway Green
Recent reports in the media have suggested that the BAE Systems Radway Green site is to be sold and that there are implications for the business being able to remain on site. While part of the site is to be sold, there will be no impact on our current business operations.
Ownership of the Radway Green site is split into two parts; BAE Systems owns the land and associated buildings around C and D blocks and the front car park. The remainder (SAA Manufacturing Facility, new car park and gatehouse) is owned by a third party and leased to the Munitions business. The lease, which runs for the next 22 years, until 2036 is protected and will not be affected by the land sale. The new landlord will purchase the site and the lease will be a condition of that purchase.
In addition, under the terms of a separate sale, BAE Systems is seeking to sell the front car park. C and D Blocks are unaffected by either proposed sale.
The Company is committed to keeping employees at Radway Green informed of the key stages of any future activity associated with this issue.