A record rent has been set at CPF’s industrial warehouse in Basingstoke of £9.95 per sq ft. The warehouse was originally developed by Prologis and acquired by the Fund in 2004 subject to a lease to Debenhams which expired in late 2017. Debenhams were paying a rent of £7.00 per sq ft and chose to vacate at lease expiry. We quickly secured a new tenant on a 15 year lease at a rent that shows an increase of 43% and a minimal void was incurred before the new lease was completed. This successful asset management demonstrates the tight supply in Basingstoke and the depth of occupier demand which has enabled the Fund to capture substantial rental growth.
The new tenant, Leverton Clarke, is a private limited company founded in 1976. The company is a specialist lithium chemical manufacturer with a growing customer base and increasing demand to supply lithium products for the manufacture of batteries for electric vehicles. Not only are we pleased to welcome a tenant aligned to a product that has exemplary sustainability credentials, but Leverton Clarke offers a substantially more secure income stream as a tenant in a growth sector compared to a retailer such as Debenhams who face challenging trading conditions. This improvement in credit risk together with the substantial increase in rent payable has been accretive to the capital valuation.
Leverton Clarke are currently undertaking an extensive fit out under a licence for alterations. We also secured a sizeable cash settlement from Debenhams to cover their dilapidations liability.
