CEG has put Stakehill Industrial Estate in Middleton on the market for £44.25m, giving a net initial yield of 6.75%, a sale at which would demonstrate the increasing strength of industrial assets in the investment market.
Stakehill is made up of 680,000 sq ft of warehouse units. WHR Property Consultants and Savills have been retained as the joint agents. CEG acquired Stakehill on behalf of investors in 2012 from Aviva Investors, and its ownership represents one of the largest industrial parks in the North West.
The increasingly low yields being reached in warehouse sales reflect a high level of demand for quality units, but the limited availability of stock. Vacancy rates are low as occupiers seek good premises, meaning that there is opportunity for rental growth.
All these factors combined mean that institutional investors in particular see industrial as a good asset class for spreading exposure, but the popularity of the sector has resulted in over-heating of the market particularly in the South. With money to spend, but little available to buy, Stakehill is expected to sell well, and potentially over the asking price.
Meanwhile, today Savills announced that it had bought the Holmes Chapel Business & Trade Park in Cheshire on behalf of the trustees of the Booth Charities for £7.25m, a net initial yield of 6.7%. InfraRed Capital Partners was the vendor.
The fully-tenanted multi-let estate totals 109,000 sq ft of industrial space across 15 units. InfraRed was represented by Christopher Dee.
In Eccles, the sale of Lyntown Trading Estate is close to getting over the line, rumoured to have sold at a price which equates to a 6.25% yield, significantly lower than the 8% expected when the site was put on the market.
Paul Richardson, CEG’s investment manager for the North, said: “Together with the Council and the Rochdale Development Agency, we have repositioned Stakehill into the successful and vibrant institutional quality investment that it now is. The estate now has enormous potential for rental performance as a result of the rental values that have been established.”
Dan Crossley, partner at WHR, said: “With very little stock available, genuinely prime opportunities have been extremely scarce. Now that Stakehill has been successfully repositioned, it is now firmly established as one of the North West’s premier industrial locations alongside Trafford Park but is arguably more attractive due to its lower-cost advantage. Due to the quality of the accommodation at Stakehill and the almost non-existent supply of alternatives, the estate offers unrivalled potential for future rental growth.”