Duchy buys in Speke

The Duchy of Lancaster has acquired 175,000 sq ft across two properties at Estuary Commerce Park in Speke for £10.6m, a net initial yield of 7.5%.

One Hercules Drive is a warehouse unit and 14 Estuary Banks is a research facility.

Both of the Duchy's Estuary Park properties are held leasehold. Hercules Drive is let to Communisis UK for 20 years from May 2007 and 14 Estuary Banks is let to the Secretary of State for Health for 25 years from October 2003.

The total income is £835,000 a year.

The acquisition at Speke follows the purchase of 450,000 sq ft at Walker Park, a warehouse distribution location in Blackburn, last June for £10.7m.

At Estuary Park the Duchy of Lancaster was represented by B8 Real Estate while CBRE acted on behalf of the vendor.

Mike Andrews, head of commercial property at the Duchy of Lancaster, said distribution warehouses in particular are a strategic target for acquisition in 2015 due to the attractive returns attainable and strong outlook for tenant demand.

He said: "We have sought to acquire properties where we can secure an attractive return against good covenants from realistic rents.

"The warehouse distribution sector offers these characteristics with a very favourable outlook for tenant demand created by strong economic growth in the regions and from increasing demands of internet shopping coupled with the lack of supply of good modern buildings."