The warehouse is situated in a prime distribution location on an 11.5 acre site in Reading, next to Junction 11 of the M4 and in close proximity to Tesco’s 1m sq ft regional hub. Other companies nearby include Royal Mail, Travis Perkins and Kuehne + Nagel.
The building is let to DHL for a further 10 years at a rent of £1.8 million pa, equating to £7.73 per sq ft, with an open market rent review due in July 2020.
Philip Hunter, director, LSH, said: "Lambert Smith Hampton is delighted to have worked with LondonMetric on the acquisition of this prime distribution warehouse investment. There is an acute lack of supply of good quality B8 stock throughout the Thames Valley, particularly units of 100,000 sq ft plus. With limited development land available, this shortage is set to continue in the short to medium term, resulting in further hardening of terms.”
Andrew Jones, chief executive of LondonMetric, said: “This acquisition is in line with our strategy of acquiring well located distribution assets that will generate real and sustainable income growth. The sector continues to benefit from growing demand/supply tension which will allow us to capture an increasing reversion over the next few years.”
The unit is on Gillette Way, directly behind Brunel Retail Park, and next to Morrisons Supermarket and was bought from Stainton International. Stainton International purchased it in 2013 for £17m.
The tenant at the time was Proctor & Gamble – although DHL were in occupation. P&G operated its break, and Stainton agreed a new 10 year lease with DHL Supply Chain Ltd.