LONDON & Scottish Property Investment Management (LSPIM), the asset manager for office and industrial property trust Regional REIT, has acquired the 11-acre industrial site occupied by Howden engineering in Braehead for £7.1 million.
With an annual rent of £763,000 (£3.73/sq. ft.) and 4.3 years to run on the lease, the price reflects a net initial yield of 10.1% after acquisition costs have been taken into account. Inglis Howie advised on the acquisition.
The 204,414 sq ft manufacturing and warehousing facility on Old Govan Road dates from the 1960s, but since taking it over in 1982, Howden has extended and developed it to accommodate large-scale manufacturing. It now comprises five interlinked warehouses, with eaves heights ranging from eight metres to 17 metres, and houses 15 heavy-duty cranes. In addition to the industrial units, the site has 18,337 sq ft of ancillary office accommodation over the ground and first floors as well as 230 parking spaces.
The area immediately surrounding the Howden site has witnessed a lot of residential development in recent years in addition to commercial, industrial and retail activity. Nearby is the Intu Shopping Centre at Braehead, which provides 370,000 sq ft of retail space. To the south on the other side of the M8 motorway lies Hillington, Scotland’s largest business park. At over 2.3 million sq ft, it accommodates over 500 organisations employing over 5,000 people.
Businesses on the park have focused on manufacturing and engineering, but more recently there has been growth in high-tech and urban logistics companies.
Stephen Inglis, London & Scottish chief executive officer, said: “This opportunistic acquisition presents a very interesting and unusual opportunity, as property of this scale does not often come onto the market. It is well let to an excellent tenant with an international pedigree. There is strong occupier demand for property assets in excess of 100,000 sq ft across Scotland, especially sites with good access to the motorway network, and the scale of the site offers longer-term potential redevelopment for alternative uses.”