Mayfair Capital charities fund buys distribution warehouse for £16.9m

By James Wallace - Wednesday, August 08, 2018 8:22

Mayfair Capital Investment Management has purchased The Big Berry, a 203,442 sq ft distribution warehouse in Droitwich for £16.9m, reflecting a net initial yield of 5.44%.

The acquisition was on behalf of The Property Income Trust for Charities (PITCH).

Let to Antolin Interiors UK until 2024 at a passing rent of £981,272 per annum, the well-specified warehouse is located on the Berry Hill Industrial Estate. The property benefits from an unusually large yard with a maximum depth of 105 metres.

Mayfair Capital Investment Director, Phil Sturdy, said: “There is a shortage of warehousing along the M42 corridor which, in combination with strong recent take‐up, has put upward pressure on rents. The current rent of The Big Berry equates to a very modest £4.82 per sq ft and illustrates the reversionary potential of the asset.”

Lambert Smith Hampton advised Mayfair Capital and M1 advised the joint venture managed by Oxenwood Real Estate.

PITCH Fund Manager, Simon Martindale, said: “The acquisition provides PITCH with exposure to the strong West Midlands industrial market and has the benefit of a rent review in December next year, where we expect to see income growth. We are seeing increasing value in emerging warehouse locations such as Droitwich where the greater availability of labour is an increasing draw for occupiers.

“The acquisition of the asset is in line with our thematic investment approach which seeks to identify latent demand created by underlying business and demographic trends. A significant outcome of this has been the Fund’s high weighting to the warehouse sector which is now up at 35% and a contributing factor to PITCH’s continued outperformance.”

PITCH is a tax-efficient unit trust for charity investors which aims to deliver a relatively high and sustainable income yield whilst at least maintaining capital value in real terms over the economic cycle.

In Q2 2018, the AREF/IPD All Balanced Property Funds Index showed that PITCH was the best-performing specialist property fund for the charitable sector over 1,3 and 5 years with a total return of 11.5% for the 12-month period to 30 June 2018. PITCH’s annualised return for the 5-year period to 30 June 2018 was 12.1%.

James Wallace is a freelance consultant and can be reached via Linkedin or email: jawallace32@gmail.com

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