South Sussex industrial estate snapped up for £21m

Mergers & Acquisitions | Property & Construction | South East

LGIM Real Assets (Legal & General) has announced that it has acquired Lineside Industrial Estate in Sussex for £21m.

The South East industrial estate has been bought on behalf of Legal & General’s Managed Property Fund from Cording Real Estate Group, the European real estate investment and asset management firm.

Located in Arndale Road at Littlehampton between Portsmouth and Brighton, the freehold multi-let estate comprises 28 industrial and trade counter units, totalling 207,360 sq ft.

It is let to 22 tenants at an average headline rent of £5.43/sq ft with a weighted average unexpired lease term of 5.2 years to expiry and 3.0 years to tenant breaks. There is an additional 0.85-acre development site, for which Cording obtained planning consent for 13,183 sq ft of industrial space.

Mark Russell, Senior Fund Manager of the Managed Property Fund, commented: “This is a great buy for the Fund, providing a rare opportunity to purchase a relatively large south east industrial asset within a supply-constrained market. The purchase allows us from day one to implement a number of genuine asset management initiatives to capture further rental growth, which will deliver strong returns to our investors.”

Adam Crickmore, Fund Manager at Cording, said: “We sold Lineside after we had applied our asset management strategy and completed our business plan. This involved increasing rental levels to £7/sq ft and securing planning consent for the additional land.

“Lineside is the third asset to be sold from a portfolio of six UK industrial estates, which we acquired in March 2015 at a blended net initial yield of 9.25%”.

Cording was advised by DTRE and Legal & General was advised by M1 Agency.

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