Harworth Group plc, a leading land regeneration and property investment specialist, has unconditionally sold a drive-thru retail unit at the entrance to its flagship Logistics North development in Bolton to Fenwall Investments Ltd (“Fenwall”) for £1.23m – representing a Net Initial Yield of 4.60%.
The 1,787 sq ft unit was constructed by Harworth in July 2017 on a design & build basis and was immediately occupied by Costa Coffee on a 15-year lease following practical completion. The sale of this investment continues Harworth’s active churn strategy of selectively disposing some of its more mature income-generating assets to reinvest in higher-yielding commercial property with further asset management and direct development opportunities across the North of England and the Midlands.
Fenwall was represented by Hyatt On Property, whilst Harworth was jointly represented by JLL and B8 Real Estate as retained agents for Logistics North.
David Travis, Director of Business Space at Harworth Group plc, commented:
“This is an excellent deal for Harworth Group and our Income Generation portfolio, providing yet another fine example of how the company crystallises value from its’ direct developments to maximise NAV growth for the business. Our focus for the remainder of 2018 is to let all remaining speculative space currently available at Logistics North; including M&G’s 174,940 sq ft “Logistics 175” unit and the two remaining units within our first phase of “Multiply”, that we are bringing forward in Joint Venture with the Lancashire County Pension Fund.”
Bob Hyatt, Director at Hyatt on Property who acted for Fenwall, said:
”The Logistics North “drive-thru” represents another high-quality investment for Fenwall’s national portfolio. In a highly-competitive bidding process we are pleased that Harworth recognised not only the value of the bid, but also the track record of the professional team engaged by Fenwall & led by Hyatt on Property, on its UK-wide investment strategy. On this project this included key inputs from Giovanni Pilla at Cushman & Wakefield. Interest in the investment demonstrated not only the quality of the overall development, but also the demand for prime assets & the clear appeal of the “drive-thru” sector.”
John Burrows, Investment Surveyor at B8 Real Estate, added:
“The significant amount of interest generated by this sale demonstrates the current strength of the investment market for quality assets, offering secure, long-term income with the benefit guaranteed rental uplifts. The exceptional strength of the location of the property, at the front of this preeminent Logistics North development, has also been reflected in the strong price achieved.
Not only does the Costa benefit from the ever-increasing workforce across the 2.5m sq ft of business space at Logistics North already built but, together with the adjacent Aldi and Green King Pub, acts as a leisure destination and valuable service stop-off for commuters on the M61.”
The sale of Unit A3 is the latest in several deals completed by Harworth at Logistics North in 2018, the North West’s largest live commercial development. It began the year by letting its’ remaining 27,884 sq ft ‘R-evolution’ unit to Vaclensa Limited on a ten-year lease at a then-headline rent of £7.00 psf. This was shortly followed in April by Multiply Logistics North, the joint venture between Harworth Group plc and the Lancashire County Pension Fund, securing Hardscape Products Limited as its’ first tenant on the 163,376 sq ft first phase of its ‘Multiply’ scheme with the occupation of the 44,868 sq ft Unit F2/A on a 15-year lease.
Multiply Logistics North is also due to practically complete the construction of its’ 270,271 sq ft second phase – a further six units of between 20,344 sq ft and 149,198 sq ft – at the start of October 2018. In July, the joint venture announced that it had exchanged conditional contracts with rijo42, the UK’s leading supplier of commercial coffee machines, beans and ingredients on a pre-let of its’ 20,344 sq ft Unit F2/E. Following practical completion of Multiply’s second phase, rijo42 will take a 15-year lease at a new headline rent for Logistics North equivalent to £7.25 psf.