The MCS Portfolio

Purchased In: April 2021
Portfolio Of Industrial Units

Initial Keen
Net Yield


We purchased a small portfolio of industrial units across Mitcham, Canterbury and Sittingbourne from a private investor in 2021.

The portfolio was acquired for £5,500,000, which reflected a keen net initial yield of 5.3% or £163 psf but with a quick reversion to a higher yield.

The sale didn’t benefit from full scale ‘open’ marketing, which presented an immediate opportunity for us.

A solus unit in Canterbury and a small four-unit estate in Sittingbourne are held freehold with Mitcham, another solus unit, held on a 999 year-long leasehold interest.
All of the units are fully-let to wellknown trade/retail sector occupiers (six companies in total). The units in Sittingbourne are let to Domino’s Pizza, Johnstone’s Decorating Centre, Topps Tiles and Sally Salon Services.

Despite the lower initial yield and higher capital value than we would have traditionally bought into, the units were well-positioned to capture strong income growth given their quasi retail and ‘M25’ locations. This has already been evidenced with the agreement of a new lease with Screwfix on the Mitcham asset where the rent has increased from £91,000 to £168,000 per annum.

In respect of both Mitcham and Canterbury, our mindset was that even if the tenants vacated, we had
the belief that these assets would be very well-received in the occupational market. The longer-term plan on these assets is that once ‘stabilised’ and rental growth is captured, we will explore a
sale on an individual basis. For Sittingbourne, there will be more of a longer-term income play waiting for rent reviews in 2024.

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