Delin Capital Asset Management, (‘DCAM’ or the ‘Company’), a Jersey registered real estate investment advisor and asset manager focused on investments in logistics assets in the UK, the Netherlands and Belgium, has invested a further £81 million in the UK market through two separate transactions. The acquisitions have been made on behalf of its €400 million Capital Preservation Portfolio I, (‘CPP I’ or the ‘Fund’), the Company’s inaugural core plus logistics fund.

In the first transaction, DCAM has acquired a portfolio of five prime distribution assets covering over 1m sq ft (95.5 k m²) of space for circa £66 million from InfraRed Capital Partners Limited (‘InfraRed’). The purchase price reflects a net initial yield of 7.2% after allowing for rental guarantees.

Two of the assets are located within the main distribution hubs of Magna Park and Swift Valley Park within the UK’s logistics ‘Golden Triangle’, and two in prime North East distribution parks. The final smaller asset is located in close proximity to Birmingham and its motorway network. With a weighted average lease length of 7.8 years, the assets are let to a variety of strong covenants including DHL, Scotts Mircale-Gro and BTC Active Wear, all of whom operate the buildings as national distribution centres.

Further details on the assets:

  • Castleford: A 382,000 sq ft warehouse located in the Normanton/ Wakefield Europort distribution hub, which is situated near to Junction 31 of the M62. The property is fully let to Exel UK Ltd with a guarantee from DHL Supply Chain Ltd on a full insuring and repairing lease expiring in 2022;
  • Doncaster: A modern, high specification distribution warehouse of circa 164,000 sq ft located on West Moor Park, a prime distribution/business park located some 5 miles to the north east of Doncaster town centre. The asset is immediately adjacent to Junction 4 of the M18, providing direct access to the national motorway network. It is let to The Scotts Company (UK) Limited and guaranteed by The Scotts Miracle-Gro Company, until 2026;
  • Lutterworth: The property comprises a high spec distribution warehouse of 164,000 sq ft located on Magna Park within the ‘Golden Triangle’. It is let to DHL Supply Chain Limited on a full repairing and insuring lease, expiring in 2023;
  • Rugby: The 212,000 sq ft property is strategically located on Swift Valley Park within the UK’s logistics ‘Golden Triangle’ formed by the M1, M6 and M69 motorways. The property is currently vacant providing an opportunity to add value through asset management.
  • Wednesbury: A high specification, modern standard distribution warehouse of 105,000 sq ft located to at Junction 9 of the M6, near Birmingham. The asset is let to BTC Activewear until 2019.

DCAM was advised by Jones Lang LaSalle and CMS. InfraRed was advised by GVA and Taylor Wessing.

In a second, separate transaction, DCAM has acquired a modern single-let standard distribution warehouse in Middlewich from receivers, Allsops for circa £15 million, reflecting a net initial yield of circa 7%.

Located on the M6 corridor which links Manchester and Liverpool with Birmingham, and with good accessibility to both the Midlands and North West regions, the 353,000 sq ft (32,000 m²) warehouse is let to Kuehne and Nagel Ltd on a full insuring and repairing lease expiring in 2017. The tenant is currently operating a FIAT contract from this site.

DCAM was advised by CBRE and CMS. DLA Piper acted for Allsops.

Christian Jamison, Chief Executive Officer of DCAM commented:

“We are very pleased to have made such a significant step forward in terms of growing CPP I’s investment in the UK market, which continues to be very competitive. By executing both these transactions within 10 days of commencing due diligence, we have demonstrated our capability to move quickly and decisively for attractive acquisitions. We continue to search for value and we will now look to add leverage to our UK portfolio as we have done recently with our Dutch portfolio.

“All these assets satisfy our investment criteria of offering high quality modern space in strong UK locations. Although the majority of the space is long let, these assets also offer some opportunity for asset management and therefore the potential to deliver value growth through new lettings or re-gears in an improving occupational market.”