W. P. Carey Boosts UK Presence With $112M Acquisition

Dixons Carphone facility, Newark, Nottinghamshire. Image courtesy of W. P. Carey Inc.

W.P. Carey Inc. has enhanced its presence in the U.K. with the recent acquisition of a 726,000-square-foot logistics facility in Newark, Nottinghamshire, in England’s East Midlands region. The REIT purchased the Class A property, which is leased in its entirety to Dixons Carphone plc, from LondonMetric Property Plc in an off-market transaction valued at $112 million.

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“Industrial represents a large percentage of our portfolio as we view it as an asset class with strong long-term growth and income potential across all locations, including the U.K.,” Gino Sabatini, head of investments at W. P. Carey Inc., told Commercial Property Executive. The newly acquired logistics facility opened its doors in 2006 as a build-to-suit for Dixons. The multinational consumer electrical and mobile retailer occupies the mission-critical asset under a long-term, triple-net lease featuring fixed rent increases and an expiration date in 2033.

Dixons Carphone facility interior, Newark, Nottinghamshire. Image courtesy of Dixons Carphone

The purchase of the Dixons property comes just weeks after W. P. Carey’s acquisition of a smaller logistics asset in the U.K. Late in the fourth quarter of 2019, the REIT purchased a 385,000-square-foot distribution center in Yorkshire, England, for $38 million in another off-market deal. “Our strength in securing these investments comes from our competitive cost of capital and ability to structure tailored transactions, as well as our reputation for certainty of close and timely execution,” Sabatini said.

European outlook

W.P. Carey has not been limiting its recent activity abroad to the U.K. Its latest investments in Europe include a $55 million build-to-suit agreement with a global automotive components and systems supplier for a 168,000-square-foot R&D facility in suburban Frankfurt, and the $16 million purchase of a 203,000-square-foot light industrial property in metropolitan Rotterdam, the Netherlands, in a sale-leaseback transaction.

W.P. Carey plans to maintain its momentum in Europe in 2020 amid robust competition. According to the Urban Land Institute and PwC’s Emerging Trends in Real Estate Europe 2020 report, logistics continues to hold its position as the top sector for investment and development projects. “Though some industry players are put off by high values here, the majority favor this sector where supply cannot keep up with the changing patterns of consumer demand. There is still seen to be lots of room for growth in e-commerce in continental Europe,” according to the report.