DTZ Investors invests €70m in prime Solihull logistics park

DTZ Investors has finalized the purchase of Solar Park in Solihull for £61.1 mln (€70.4 mln), representing a 3.5% topped-up net initial yield.

Solihull

Developed in stages between 2000 and 2005, the property features a high-quality mid-box logistics park consisting of seven units. These units encompass approximately 26,201 m2 on a 7.5-hectare site.
The logistics park is fully occupied by seven tenants, with a weighted average unexpired lease term of 2.5 years until the earliest break options and 6.1 years until lease expiration. The current average passing rent is low at £7.99 (€9.23) per square foot. However, the most recent lease agreement within the park was secured at £13.00 (€15.01) per square foot, a 62% increase over the average passing rent.
Solihull's central UK location enables tenants to reach 90% of the UK population and all major markets within a four-hour HGV drive. The town boasts excellent transport connections via the M42, M40, M6, and M5 motorways, as well as Birmingham Airport. These transport links provide convenient access to significant urban centers, including central Birmingham, Coventry, and Leamington Spa.
Tom Royston, director at DTZ Investors, commented: “Solar Park is a high-quality, multi-let mid-box asset, strategically positioned in an affluent suburb of Birmingham. The property offers significant growth potential, with the ability to capture reversionary potential and deliver a running yield in excess of 5% within 18 months.”
John Prichard, partner in the Industrial Investment team Newmark, added: “This was a rare opportunity to acquire a high-quality regional mid-box park let off low passing rents in a market which is affluent and very supply-constrained. With 87% of the contracted income subject to rent review or lease expiry within the next 18 months, we anticipate the Fund will be able to capture significant rental growth in the near term.”
DTZ Investors was represented by Newmark in the transaction, with ACRE Capital acting on behalf of the vendor.