Press Release
THE CROWN ESTATE ACQUIRES 60,400 sq m WAREHOUSE AT GAZELEY & LAND SECURITIES’ MAGNA PARK MILTON KEYNES
26 March 2007
- Single largest acquisition by The Crown Estate, in excess of £72 million
- Pre-let on 20 year lease to John Lewis
- Warehouse features groundbreaking sustainable design delivering an estimated 40% carbon dioxide reduction and energy savings of £250,000 per annum to John Lewis
The Crown Estate today announced the freehold acquisition of a 60,400 sq m (650,000 sq ft) major distribution warehouse in Milton Keynes for a price above £72 million.
The property is currently under construction at Magna Park Milton Keynes, south east of the city. Upon completion of building work in September the warehouse will be let in its entirety to the John Lewis Partnership (John Lewis) for a term of 20 years.
The 81 hectare (200 acre) Magna Park Milton Keynes logistics park, a joint venture by Gazeley UK Limited and Land Securities, probably represents the best distribution location in the UK with excellent access to London, the south east and the midlands. It is strategically located at the heart of the UK’s national motorway network, linking the channel and east coast ports with the northern markets. The park has planning consent for 316,000 sq m (3.4 million sq ft) of modern and flexible warehouse accommodation.
It is planned to be at the leading edge of environmental sustainability with initiatives including renewable energy sources. It is anticipated that proposed measure will reduce John Lewis’s operational costs by approximately £250,000 per annum and will reduce carbon dioxide output by 40%. John Lewis is the first occupier to take space at the new beacon sustainable logistics park scheme.
Jim Yates, Head of Regional and Residential at The Crown Estate, who negotiated the deal, said: “The initial yield from the investment will be just under 5%. We have a fantastic tenant, a high level of revenue security, and possibly the best building of its type anywhere in the UK. This a tremendous opportunity for us. It shows excellent growth prospects – even though the building is not yet complete – with guaranteed minimum rental uplifts built into the lease.”
Nigel Godfrey, Development Director for Gazeley, commented: “We are absolutely thrilled to have secured John Lewis as tenant and The Crown Estate as purchaser of our first unit at Magna Park Milton Keynes. We couldn’t have asked for a better start. Environmental sustainability is central to Gazeley’s business and Magna Park Milton Keynes is our flagship. Both John Lewis and The Crown Estate share in our aims and aspirations here.”
Giles Clarke, Director of Investment at The Crown Estate, said: “This acquisition is not only the largest to date by The Crown Estate but also one of our greenest – it is a distribution warehouse at the cutting edge of environmental sustainability. The inclusion of features like wind power and photovoltaics not only reduce the site’s carbon footprint – they will also deliver significant savings for John Lewis.
“There is a strong fit between this acquisition and our wider aspiration to make our £6 billion estate more environmentally friendly. In the West End, for example, we are inviting our commercial tenants to bring forward opportunities for us to co-invest in the refurbishment of their buildings and extend leases so that we can make our properties more sustainable. This is a positive step towards true collaboration between landlords and tenants which is not only good for everyone’s business but good for the environment too.”
The Crown Estate was represented throughout by Drivers Jonas with legal advice and conveyancing by Burges Salmon. Jones Lang LaSalle and Burbage Realty acted for Gazeley and Land Securities.
Further Information
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