Our Birmingham Industrial and Logistics team found an opportunity to acquire a 171,894 sq ft distribution facility on Hams Hall Distribution Park. The property comprises a detached purpose built distribution facility with a separate three storey office block to the front within a secure fenced site.
Working with our Capital Markets team, we identified Legal & General (L&G) as a suitable purchaser given their investment requirements at the time.
Scope for future expansion of existing premises
The property is situated on a site of approximately 5.77 hectares (14.27 acres) providing a very low site density of 26% - 31% if the canopies are included. We therefore advised the client of future scope for expansion of the warehouse.
Opportunity to increase the rent
Our devaluation of the previous rent review was £5.00 sq ft applied to the warehouse and offices; £1.50 sq ft applied to the canopies and a further £40,000 per acre per annum applied to the assumed 0.85 acres of expansion land. We were confident of achieving a rent of £5.25 sq ft on the warehouse if it became vacant, providing the client with potential additional income of £43,000 per annum.
Pre-acquisition due diligence
Our Building Consultancy team also identified disrepair and areas where costs could not be recovered from the existing occupier. They also identified legal issues that needed to be cross checked prior to an exchange of contracts.