BAE warehouse sold for £50m

Avison Young, acting on behalf of Aviva Investors, has secured the sale of a shed occupied by BAE Systems in Washington, Tyne and Wear to a local government pension scheme, for a sale price of £50.15m, reflecting an initial yield of 6.8%.

• Subscribe for free to the Place North East Briefing for more property news like this

The 346,000 sq ft property was built in 2010 and is located at Radial 64 on a 16.5-acre site. The investment is a virtual freehold, being held on a 999-year ground lease from 2010, at a peppercorn annual rent.

BAE Systems has a 25-year lease from 2011, with a further 13 years remaining. The current passing rent is £3.685m a year and is subject to annual uplifts of 3%.

Simon Beanland, principal at Avison Young, said: “We were pleased with the outcome of this sale, following a best bids process. The property has made an excellent return for the client over the last 12 years. Timing-wise the disposal is in keeping with the fund’s strategy to sell out of relatively shorter let assets.”