Theale: McKay announces £11m warehouse acquisition

McKay Securities plc, the only real estate investment trust specialising entirely in the South East and London office and industrial markets, has acquired a freehold distribution unit for £10.70 million. The property was acquired from Patron and APAM following their recent purchase from Goodman.

The 96,850 sq ft distribution facility is located at Junction 12 of the M4 motorway, adjacent to the Arlington Business Park at Theale in Berkshire. This recognised distribution location is on the edge of Reading and 45 miles west of Central London.

The unit is let to Kuehne & Nagel, the international logistics and warehousing specialist, from where it runs a dedicated frozen distribution operation providing logistics support for Waitrose. The annual rent of £750,000 pa, which is equivalent to a low rent of £7.74 per sq ft, represents an initial yield of 6.6% on the purchase price, increasing to 7.1% off an estimated ERV for the existing building of £8.25 per sq ft.

The distribution facility was built in 1984. It comprises a steel framed warehouse of 83,225 sq ft with office and workshop facilities totalling 96,850 sq ft on a six-acre site. The low site cover results in the property benefiting from a large, secure yard.

In addition to continued use for distribution, the property has planning consent for 209,992 sq ft redevelopment to office space as an extension of Arlington Business Park.

Commenting on the acquisition, Simon Perkins, managing director of McKay, said: “This acquisition was completed within five working days from the agreement of terms, demonstrating our quick decision-making process, rapid execution capability and the benefit of having availability of funds.

"This is an excellent opportunity let to a first-class operator. The supply of warehouse accommodation in such close proximity to the M4 motorway is limited, and the location, size and large secure yard are all positive characteristics that will appeal to occupiers."

Haslams and Whitmarsh Holt Young acted for McKay. Tudor Toone acted for Patron and APAM.