Duchy targets further acquisitions following £10.6m investment
The Duchy of Lancaster is targeting further commercial property investment following the £10.6m acquisition of 175,000 sq ft of space at the Estuary Commerce Park in Speke, Liverpool.
The Duchy has acquired two modern properties – a warehouse and a purpose-built research facility – at 1 Hercules Drive and 14 Estuary Banks, at an initial yield of 7.5%.
This follows the purchase, last June, of two units at Walker Park, a strategic warehouse distribution location in Blackburn, for £10.7m.
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.
“We have sought to acquire properties where we can secure an attractive return against good covenants from realistic rents,” he said.
“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.
“The units at Estuary are two well-let, good quality buildings in a recognised location offering high standard working environment at an attractive price.”
Mr Andrews added: “The Duchy’s long-term urban strategy continues to be to secure strong returns from good quality properties. We have the capacity for further acquisitions, whether they be similar to these distribution hubs or office spaces in core locations.”
Both of the Duchy’s Estuary Park properties are held leasehold, with 1 Hercules Drive let to Communisis UK Limited for 20 years from May 2007 and 14 Estuary Banks let to the Secretary of State for Health for 25 years from October 2003. The total income is £835,000 per annum.
Estuary Commerce Park offers a strong infrastructure with strategic transport links to the M62, Liverpool John Lennon Airport and Garston Freightliner Rail Terminal. Home to occupiers including Johnson Controls, Shops Direct Group, B&M Bargains and DHL International, the park is also in close proximity to Jaguar Land Rover at Halewood.
Units A and B at Walker Park total 460,000 sq ft and are held freehold, leased to two tenants, Michael Davies and Associates Ltd – a wholly owned subsidiary of Bunzl Plc. – and Sally Salon Services, the world’s largest distributor of professional beauty products with over 4,000 stores worldwide.
At Estuary Park the Duchy of Lancaster was represented by B8 Real Estate while CBRE acted on behalf of the vendor.