Wednesday, May 12, 2021
Real EstateUK

Mayfair Capital’s PITCH increases exposure to logistics

Mayfair

This acquisition enhances Property Income Trust for Charities’ (PITCH) ability to provide long-term and sustainable income for clients

Mayfair Capital’s Property Income Trust for Charities (PITCH), has acquired a 108,000 sq ft logistics property in Stoke-on-Trent for GBP10.29 million, reflecting 5.10 per cent Net Initial Yield assuming standard purchase costs.

M1 Agency advised Mayfair Capital and Avison Young advised LaSalle Investment Management.

This acquisition brings PITCH’s allocation to the logistics sector – currently the best performing segment in the real estate market – to 40%. Unit DC2, Sideway Park, Stoke-on-Trent comprises a well specified distribution warehouse built in 2018.

The property has strong sustainability credentials, receiving a BREEAM certification of “Excellent” and EPC of A. The building has a rainwater harvesting system and is 80 per cent carbon neutral, with LED lighting throughout. This ensures the buildings’ alignment with Mayfair Capital’s integrated environmental policy.

This acquisition enhances PITCH’s ability to provide long-term, sustainable, and growing income for charity clients. The building is let to the fast-growing transport and logistics company Simarco, for an unexpired lease term of 9.3 years. The lease benefits from a fixed uplift in five years’ time equivalent to 2.1 per cent pa, ensuring guaranteed real income growth.

The property also offers attractive, long term rental growth prospects. The current rent of GBP5.16 per sq ft stands at a discount to prime rents in the West Midlands – currently at in excess GBP6.50 per sq ft. There is a limited supply of quality warehouse space in Stoke and very little new space of this size in the pipeline, due to land supply constraints – thus increasing the likelihood of rental increases.

Mayfair Capital’s thematic approach to investing looks to capitalise on long-term structural changes in the economy to identify long term drivers of occupational demand. As traditional UK manufacturing and production sectors are expected to decline, due to structural changes accelerated by the pandemic and Brexit, we expect logistics operators to be increasingly attracted to areas of strong, cost-effective labour supply such as Stoke. As occupiers become increasingly discerning on asset quality, specification, and sustainability factors, we expect buildings such as this to continue to generate a resilient and sustainable cash flow to investors.

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