We have concluded a lease renewal at this modern industrial unit in Avonmouth, an established distribution location to the north west of Bristol city centre.
Built in 2006, the unit comprises a single high bay warehouse constructed as one of four high quality units around 12 years ago. The building benefits from 10m eaves and a self-contained service yard.
The previous rent equated to £6.50 per sq ft on a lease that expired in September 2018. Following negotiations, a new 10 year lease was agreed with the tenant with a break option in the fifth year. The rent has been revised to £7 per sq ft based on comparable market evidence for similar high quality industrial units and reflecting recent rental growth in the Avonmouth market as a result of an increasingly limited supply and healthy occupier demand.
The lease renewal added over 19% (£600,000) to the asset’s capital value reflecting the increased rent and subsequent yield improvement, and defensively re-positioned it by securing a longer lease term.
We believe that the asset will continue to perform strongly based on the positive rental growth forecasts for Bristol’s industrial market.