Mayfair Capital furthers commitment to warehousing with new acquisition

1 March 2022

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The Property Income Trust for Charities (PITCH), managed by Mayfair Capital Investment Management, has acquired a high-specification warehouse situated in the UK’s ‘Golden Triangle’ of logistics – a location widely recognised for its unrivalled connectivity – for £14.8m.

The property, built in 2003, is a modern, high-specification logistics warehouse situated on Toledo Close, in Coventry Business Park; the principal mixed-use business park in the city. The asset provides a mid‐box industrial unit, which are in short supply in Coventry.

The property, whose specification exceeds what would be expected for a unit of this size, is situated 1.5 miles west of the city centre and fronts the A45, Coventry’s main ring road. This permits occupiers to serve 91% of the UK population and major UK markets within a 4‐hour HGV drive time. In addition, the property is strategically located near East Midlands airport, the UK’s busiest pure cargo airport.

PITCH’s thematic approach, which seeks to ensure its buildings are aligned with occupational demand, now and in the future, grades each asset according to five core themes: change & disruption, climate & environment, communities & clustering, consumers & lifestyle and connectivity. Toledo Close scores highly against each of these investment themes, particularly for change & disruption and consumers & lifestyle, which each achieved the maximum rating.

The acquisition provides PITCH with an initial income return of 3.86% per annum, forecast to rise to 4.43% on settlement of the January 2023 rent review. It also furthers Mayfair Capital’s exposure to the West Midlands industrial market, which benefits from favourable demand and supply fundamentals. The facility has been fully let to logistics, e‐commerce and supply chain management specialist Woodland Global with the passing rent reflecting a significant discount to the current market rent.

The acquisition follows a highly successful year for PITCH in terms of both returns and new investment activity. The PITCH portfolio delivered an annual fund return of 22.9% in 2021 (as at 31 December 2021, source MSCI/AREF1), with the Fund’s warehouse assets delivering 27% like-for-like capital growth. The end of last year saw the Fund complete £35m of retail warehouse acquisitions, comprising two parks in Bedford and Milton Keynes.

Simon Martindale, fund director of PITCH, says: “This acquisition is a testament to our conviction in the continued dominance of the UK industrial sector, which saw record take up last year as the rise of e-commerce gained further traction and continued to radically transform the UK retail landscape. We expect the industrial sector will continue its growth trajectory through 2022 and beyond, providing investors with resilient income and attractive capital growth.

“Toledo Close strongly reflects our disciplined strategy to invest in high-quality, well-connected warehouse assets, and further improves the composition of industrial holdings within the portfolio, where our weighting to the sector now exceeds 46%. We expect the asset to provide strong rental growth and enduring income resilience during our hold period.”

Christopher Robinson, Director in the Industrial & Logistics investment team, says: “‘We are delighted to have acquired this asset on behalf of our client Mayfair Capital, in what was a very competitive process. The asset perfectly suited our client’s requirement for a well let, high specification industrial property in the West Midlands market. As well as having excellent fundamentals, there is a rent review due next year, which provides an opportunity to secure a significant rental uplift.

JLL acted for Mayfair Capital with Savills and Knight Frank acting jointly for the vendor.

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