Harworth Group plc has acquired Four Oaks Business Park in Preston, Lancashire for £13.425 million as part of its strategy to strengthen its income portfolio and expand further its presence in the North West.
Four Oaks Business Park is located five miles to the south east of Preston and sits at the intersection of Junction 9 of the M61, Junctions 29 and 30 of the M6 and Junction 2 of the M65. The site is close to Harworth’s Logistics North development in Bolton and its recently acquired Moorland Gate Business Park in Chorley.
The site extends across 19.4 acres with 428,800 sq ft of built logistics warehousing space. Harworth’s freehold purchase represents a Net Initial Yield of 8.74% and a reversionary yield of 11.39%, with a WAULT of 6.44 years and a low capital value of £31.30 per sq ft. There are further asset management and development opportunities that the Company will look to capture, including lease re-gears to conservative ERVs of £3.75 psf and the potential development of a further 0.5 acres for roadside uses.
It is Harworth’s fourth major acquisition of 2016, with £55 million of acquisitions now made since December 2014 as the Company replenishes its strategic landbank and improves the quality of its income base. It is Harworth’s second purchase in Lancashire in the fourth Quarter of 2016, following its acquisition of Moorland Gate Business Park in Chorley for £4.5 million in November. The acquisition was wholly funded through existing cash reserves and completion took place within six weeks of agreeing heads of terms.
Commenting on the purchase Owen Michaelson, Chief Executive Officer, said:
“The acquisition of the well-located Four Oaks Business Park continues the process of increasing and improving the quality of our recurring income base whilst also providing a blend of asset management and development opportunities to generate future value.”
Gary Owens, Director of Acquisitions, added:
“This is an excellent purchase for Harworth, reinforcing our objective of replenishing our portfolio with new sites in the regions in which we already operate. The purchase of Four Oaks and Moorland Gate reflects our confidence in the North West property market which we’re keen to build on in 2017. Completing the purchase within six weeks of agreeing heads of terms also maintains our reputation for transacting swiftly, however complex the site acquisition.”