Investment Case Studies

Staples, Daventry

In  2011 Cyril Leonard advised private clients on the purchase of a prime 240,000 sq ft distribution warehouse situated in Daventry, within the Logistics Golden Triangle close to Junction 18 of the M1.

The warehouse was constructed in 2005 and is let in its entirety to Staples UK Retail Limited for a term of 15 years on full repairing and insuring terms at a rental of £1,126,000 per annum equivalent to £4.50 per sq ft.  There is a tenant option to terminate the lease at the end of the 10th year.  This warehouse is their UK distribution centre. A price in the region of £12,200,000 was paid for the freehold interest to show the investor a net return of 8.72%.  The price also equates to only £48.75 per sq ft which is close to the cost of reinstatement.

In May 2013, Cyril Leonard advised the same client on the acquisition of the adjacent property known as 1-3 Watling Park which amalgamated the two interests and provided a self-contained logistics park totalling 25.6 acres of land.

Watling Park itself comprises three warehouses totalling 209,251 sq ft and is multi let to two tenants producing an annual income of £854,000 pax. The property was acquired for a price of £6.8 million reflecting a net initial yield of 11.9% and a low capital value of £32.50 psf.

Having secured both sites for the client, Cyril Leonard have secured the long term position for them whereby redevelopment of the sites can become an option but also maintaining control of tenants within it.

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