Stenprop: Acquires Bowthorpe Park For £19.6M

22nd July 2020 | Stenprop Limited

STENPROP ANNOUNCES ACQUISITION OF BOWTHORPE PARK INDUSTRIAL ESTATE IN NORWICH FOR £19.6M

Acquisition is in line with the Company’s strategy to become a 100% UK Multi Let Industrial business-

Stenprop, the UK multi-let industrial (“MLI”) property company, announces that it has simultaneously exchanged and completed the purchase of Bowthorpe Park Industrial Estate in Norwich, UK from Blackrock Industrial Trust for £19.6 million. The purchase price reflects a net initial yield of 6.35%.

With excellent access to the A47 and in turn the national road network, the 16-acre park provides 22,829 sqm (245,730 sq ft) of gross lettable MLI space across 76 units. It is currently circa 94% let to a wide range of tenants including manufacturers, distributers, high-tech companies and trade counters at a weighted average rental of £58 per sqm (£5.40 per sq ft).

The acquisition is in line with Stenprop’s strategy to become a 100% UK MLI business. As a result of this acquisition, the percentage of MLI assets within Stenprop’s portfolio rose from 58% to 60%, based on the Company’s total property asset value at 31 March 2020. Following completion of the sale of the Neucӧlln Carrée retail park in Berlin, expected to occur by no later than 15 January 2021, the percentage of MLI assets within the portfolio will rise to 62% based on the Company’s total property asset value at 31 March 2020.

Will Lutton, Head of Investment at Stenprop, commented:

“We are pleased to have secured this estate, which fits well with our investment criteria. The small average unit size mirrors our existing portfolio and variety of occupiers provides diversification of income. We are confident we can drive performance through the roll-out of our Industrials.co.uk leasing platform and flexible leasing model across the asset.

“We have been encouraged by the data we have collected from our existing portfolio during the COVID-19 crisis, with evidence of pent up demand from occupiers across the country. That knowledge, combined with the underlying market dynamics in Norwich, which has a low void rate, is a strong indicator that this estate is well placed to deliver sustainable and growing income returns.”

The information below is included in accordance with the requirements of the Johannesburg Stock Exchange.

Terms of the Acquisition

Stenprop acquired the property from BNPDSJ & BlackRock (CI) Limited as trustees of BlackRock Industrial Trust (the “Seller”) for a total purchase price of £19,600,000 (the “Purchase Price”). Simultaneous exchange and completion of the transaction took place on 21 July 2020, being the effective date of the acquisition. The acquisition was funded from the Company’s existing cash resources.

Normal warranties and indemnities have been provided by the Seller for a transaction of this nature.

The Purchase Price for the property is considered to be its fair market value, as determined by the directors of the purchaser. The directors of the purchaser are not independent and are not registered as professional valuers or as professional associate valuers in terms of the Property Valuers Profession Act, N0. 47 of 2000.

Financial information

Set out below are the forecast revenue, operational net income, net profit after tax and earnings available for distribution relating to the property (the “forecast”) for the period ending 31 March 2021 and the year ending 31 March 2022 (the “forecast period”). The forecast, including the assumptions on which it is based and the financial information from which it has been prepared, is the responsibility of the directors of the Company. The forecast has not been reviewed or reported on by independent reporting accountants.

The forecast presented in the table below has been prepared in accordance with the Company’s accounting policies, which are in compliance with International Financial Reporting Standards.

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