-Targeting UK portfolio in excess of 1 million sq ft by end of 2020-
Moorfield, a leading boutique UK real estate private equity fund manager, on behalf of Moorfield Real Estate Fund IV (MREF IV), announces that it has acquired two logistics assets, in separate transactions, for £14 million, reflecting a blended net initial yield of 7.7%.
Having successfully executed a logistics investment strategy for MREFIII, Moorfield is now rebuilding a portfolio for MREFIV with a target of investing in locations set to benefit from population increases and infrastructure improvements. Moorfield’s strategy is to identify real estate supply / demand imbalances and is targeting sectors benefitting from societal shifts. Logistics continues to benefit from the growth of online retailing and the strategy sits alongside a focus on student accommodation, Build to Rent and senior living.
In Milton Keynes, Moorfield has acquired a 129,076 sq ft warehouse from Aberdeen Standard Investments. The property is let off a reversionary rent to Bong UK Limited, one of Europe’s largest producers of speciality packaging and envelopes, on a 12 year lease with 6.5 years remaining, and serves as its UK headquarters. Milton Keynes is the key South East and M1 corridor distribution location, midway between the UK’s two most populous cites, London and Birmingham.
Milton Keynes is also located in the middle of the Oxford–Cambridge growth corridor; an area undergoing substantial economic and population growth. This and the associated infrastructure improvements are expected to translate into longer-term increases in land values and industrial requirements in the region.
In a second transaction, Moorfield has purchased, via sale and leaseback, a single-let 111,000 sq ft distribution warehouse in Felixstowe, from Indo European Foods. A new 20 year lease has been agreed with the tenant, one of the UK’s largest suppliers of rice, who has occupied the site for 15 years.
Felixstowe has a favorable supply / demand dynamic with almost no vacancy. Its appeal as a logistics hub is growing, due to its close proximity to London and lower congestion, labour costs and rents. Adjoining the Port of Felixstowe, the United Kingdom’s busiest container port which is set to benefit from existing and future investment, the property is less than half a mile from the A14, which connects Felixstowe to the national motorway network.
Charles Ferguson-Davie, Chief Investment Officer at Moorfield Group, commented: “These acquisitions fit with our investment strategy of acquiring c. £5m-£15m, single-let logistics assets in undersupplied locations, which offer significant reversionary potential through a range of asset management initiatives. Our ambition is to build a portfolio in excess of 1 million sq ft of logistics assets by the end of 2020.”
Moorfield was represented by Fineman Ross and WBD in both transactions. Knight Frank acted for Aberdeen Standard Investments on Milton Keynes and CBRE acted for Indo European Foods on Felixstowe.