Industrial estate acquired by Warehouse REIT in £20m deal

Render Of Industrial Estate

Cambridge South Industrial Estate has been bought by Warehouse REIT in a deal worth £20.15m. 

The site, located on the wider Dales Manor Business Park, just seven miles south of Cambridge city centre, six miles north of Chesterford Research Park and within four miles of both the Wellcome Genome Park and Granta Park, comprises 68,000 sq ft of newly built multi-let industrial units and an adjacent development site. The purchase price reflects a net initial yield of 4.15% on the apportioned price for the completed buildings.

The property offers both strong day one income and the potential to add value through ground up development in the longer-term, taking advantage of the chronic imbalance of the supply and demand of modern industrial space in Cambridge. The region is one of the UK’s fastest growing employment and innovation centres, characterised by a 15-year availability low at just 3.7% and record prime rents seen across its industrial market. 

Phase one of the estate, totalling 68,000 sq ft across 13 multi-let industrial units, was recently completed to a very high specification with EPC ratings of ‘A’ through to ‘B’ and features including a renewable energy source on site. It plays host to a diverse range of tenants spanning the packaging, food distribution, storage, wine wholesale and research sectors, with 83% of units currently let with a further 5% under offer. Interest remains strong in the remaining three vacant units. 

Overall, the property currently generates £672,000 of contracted rent per annum, including a guarantee on the last three vacant units, which equates to a low passing rent of £9.89 per square foot and has a weighted average unexpired lease term of over 8 years.

Phase two of the site is a 3.4 acre development with planning permission secured for an additional 14-unit multi-let scheme totalling 73,000 sq ft. It is located directly adjacent to phase one, and Warehouse REIT intends to undertake a phased development approach against partial pre-lets. 

The estate is located on the established Dales Manor Business Park in Sawston, and is easily accessible from Cambridge City via the A1307 and the wider region via the A505, M11, A11 and A14, whilst mainline rail links on the Cambridge/London Liverpool Street line are available from the nearby villages of Great Shelford and Whittlesford Parkway. 

It is already home to a number of established occupiers, including Vindis, Unisurge, Cambridge University Hospitals and Morgan Sindall, alongside a range of local and regional businesses, who are boosted by the excellent transport links and its proximity to Cambridge’s 124,000 residents.