Cushman & Wakefield, the world’s largest privately-owned commercial real estate services firm, has advised Legal & General on a £114 million pre-let forward funding deal, showing a net initial yield of 4.64%, of a Waitrose distribution warehouse in Milton Keynes.
This is the third largest investment deal ever in the UK for a single let distribution warehouse.
The 938,449 sq ft distribution warehouse is currently being constructed by the developer/vendor Gazeley and completion is due at the end of November 2014. Waitrose has signed a 30-year pre-let with annual rental increases of between 1.5% to 2.5% per annum.
Cushman & Wakefield’s Richard Peace, partner in the firm’s industrial capital markets team, led the deal, with assistance from Mark Webster, Gordon Reynolds and Greg Cooper from the business’ industrial agency practice.
Richard Peace said: “This is a great deal for the Annuity Fund at L&G which provides 30 years of secure income to Waitrose on a prime logistics unit with annual rental growth. Waitrose has been a rare covenant to secure in the market and this is one of the few opportunities in the UK to own a Waitrose distribution hub. We have a great knowledge of the location and site due to our recent work for John Lewis which occupies more than 1m sq ft on the park – this certainly helped during the deal.”
Cushman & Wakefield’s UK industrial capital markets team is on course to have bought and sold approximately 3.5m sq ft of logistics properties by the end of June 2014 amounting to c. £350 million.