At CPF’s industrial warehouse located in the East Midlands in Wellingborough we have completed a new 10 year lease with the existing occupier, CCL Labels Limited. This property was acquired by CPF in 2011 at a yield reflecting in excess of 9%. At purchase the property was let to CCL Labels on a lease due to expire in March 2020. In 2019 as the lease expiry approached we engaged with the tenant and agreed to extend the lease by 5 years. Terms were agreed prior to the Covid-19 crisis and it is interesting to note that subsequent to the lock down in the UK, the tenant approached us seeking a longer term commitment so we agreed a new 10 year lease at the same rent but with additional rent free.
CCL is a manufacturer to adhesive labels for a wide variety of customers and industries. The business is headquartered in North American and we secured a guarantor to the lease from the UK parent company which has net assets in excess of £400 million.
To date, the property has delivered £4.5 million of income to our investors and if we hold to expiry of the new lease in 2030 then the asset will have delivered approximately £8.5 million of income against a purchase price of £5.3 million. We are pleased to report the execution of asset management activity during the Covid-19 emergency and to have secured a long term commitment from a good quality tenant which safeguards income for a further 10 years and will increase the capital value of the asset.
