Warehouse REIT expands portfolio with £38.6m acquisition of Ventura Retail Park

Warehouse REIT, a prominent investor in multi-let warehouses, has announced its latest acquisition: Phase 2 of Ventura Retail Park in Tamworth, near Birmingham, for a total of £38.6 million. This acquisition, which sports a net initial yield of 7.4%, marks a significant expansion in one of the UK’s leading retail spaces.

Ventura Retail Park, notable for being one of the top 20 shopping parks in the UK by square footage, comprises two phases. Phase 2, the subject of the recent acquisition, spans 120,000 square feet and is fully leased to top-tier retailers including Boots, Sports Direct, and H&M. The total contracted rent for the scheme stands at £3.1 million, with a weighted average unexpired lease term (WAULT) of 6.4 years.

Strategically located, Ventura is part of a larger retail warehouse cluster encompassing over 700,000 sq ft of prime retail space, with other major occupiers like Next, Primark, and Marks & Spencer. Positioned adjacent to the A5 and within a 30-minute drive from Birmingham, Ventura Retail Park ranks in the top three centres for comparison goods spend in the UK.

This new acquisition aligns with Warehouse REIT‘s strategy of focusing on multi-let assets, reinforcing its portfolio in a region considered one of its “highest conviction” areas. The management team at Warehouse REIT brings extensive experience in retail warehouse management, enhancing the strategic fit of this acquisition.

Recently, Warehouse REIT has completed £165 million in sales as part of its disposal plan announced in November 2022. These sales have significantly reduced the company’s net debt to approximately £235 million prior to this transaction. This proactive financial management provides Warehouse REIT with a robust platform for further selective acquisitions that promise accretive growth.

Simon Hope of Warehouse REIT expressed his enthusiasm for the acquisition: “This was a rare opportunity to acquire an asset that will be earnings enhancing in year one. Retail warehousing is a sector where we have deep experience, and which plays to our strengths in multi-let asset management. Rents have rebased and are now starting to grow, while pricing remains attractive relative to equivalent assets on the multi-let industrial side, which should support earnings and help rebuild dividend cover – a key priority for this business.”

The acquisition of Ventura Retail Park by Warehouse REIT is a textbook example of strategic asset growth in retail real estate. It reflects the company’s acumen in selecting high-yield properties that align with their long-term investment strategy and financial health goals. This move not only diversifies their portfolio but also strengthens their market position in a competitive sector.