Property overview

Gatehouse Trading Estate, Lichfield Road, Brownhills WS8 6JZ

under offer

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£1,700,000
Mar 2022

Multi let industrial investment.

 

Gatehouse Trading Estate is located on Lichfield Road, Brownhills an established industrial area to the north east of the town centre, ½ mile from the A5.

 

The 31 unit multi let industrial estate comprises predominantly starter units (16 units sold off), on an overall site of 3.70 acres including 0.5 acres of secure storage compounds.

 

The retained industrial units (totalling 16,396 sq ft) are currently fully let to 11 tenants, generally on 3-5 year terms. The five compounds are fully let to four tenants. The Gatehouse is let on an AST. Overall there is an AWULT of 2.84 years to expiries and 1.36 years to breaks.

 

The estate has a strong history of occupancy, the current tenants on average have been on site for over 8.5 years.

 

The current combined gross rent is £147,347 per annum. After deducting the inclusive service charge and insurance costs the net rental position is £129,300. This reflects only £5.87 per sq ft on the industrial units.

 

There is a wide variety of businesses on the estate which are predominantly local companies.  There are opportunities to add value through asset management in the short term:-

 

  • There are regular lease expiries throughout 2022 & 2023 which will provide opportunities to improve rents further in line with ERVs.
  • Look to sell off further units on the estate, there are a number of current occupiers who would be interested in acquiring units.
  • Look to develop some of the compound areas.
  • Over time look to change the occupational leases to be exclusive of service charge contributions.

 

Offers sought in excess of £1,700,000, a purchase at this price would reflect a net initial yield of 7.16%, on the net rent receivable, assuming costs of purchase of 6.20%. Based on ERVs this would produce a reversion to 7.98%.

 

A purchase at this level shows a capital value of under £75 per sqft for the industrial units.

 

View other sales.

 

St Pauls Office Investments Retail & Retail Warehousing investments