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IO and Bradford Estates launch new industrial property vehicle

IO has launched a new multi-let industrial property income vehicle, Bradford IO (BIO), with the initial backing of the Earl of Bradford’s Bradford Estates Limited, and the acquisition of five investments in separate transactions for a total of £10.7 million.

The investments include Swift Business Centre in Cardiff, Northpoint Business Estate in Rochester, Chester Trade Park in Chester, Tweed Road Industrial Estate in Clevedon and Walton Industrial Estate in Stone.

The five investments total 160,000 sq ft across 53 units with a total of 40 tenants and have a combined vacancy rate of 5.25 per cent. The blended net initial yield is 7.1 per cent and the blended gross reversionary yield is more than 9 per cent.

Angus Scott-Brown, managing director of IO, says:

“BIO has been established to capitalise on the opportunity to generate strong returns by acquiring multi-let industrial estates at relatively high yields. Even though the market seems to be softening in other sectors, the investment opportunity for multi-let industrial estates today is still compelling.

The gap between yields and the cost of capital remains very attractive, but, with limited supply and no new development coupled with growing demand, the prospect of rental growth continues to improve, which we believe will continue to deliver strong income and capital returns both now and in the longer term. The industrial sector has always proved to be an excellent income generator.”