Kellogg distribution centre bought for £23.5M

By Gwen Ridler

- Last updated on GMT

Kellogg’s distribution centre has been acquired by Tritax Big Box
Kellogg’s distribution centre has been acquired by Tritax Big Box

Related tags Manchester

Kellogg’s Trafford Park distribution facility was acquired by a real estate investment trust for £23.5M yesterday (August 9).

The production facility is one of three properties let to Kellogg at Trafford Park, Manchester and close to the company’s site at Barton Dock Road – the largest cereal factory in Europe – and home to Kellogg’s national operations.

Tritax Big Box’s purchase reflected a net initial yield of 5.9% on the asset acquisition. The purchase was funded from equity proceeds.

The property was acquired with an unexpired lease term of about 1.75 years with a rent of £14.85/m­­­2​­ and a capital value cost equivalent to approximately £247/m2​.

‘World class company’

Tritax partner Colin Godfrey said: “Kellogg is a world class company and we are delighted to add them to the very strong list of tenants in our portfolio.

“Trafford Park is a prime logistics location where we already own the L’Oréal distribution facility. The initial yield is accretive to our portfolio running yield and the short unexpired lease term presents an opportunity for value enhancement.

“This investment is highly reversionary, providing the potential for significant rental uplift upon re-letting or lease re-gear.”

‘Largest business parks’

Trafford park is one of the largest business parks in Europe and has one of the highest concentrations of industrial and logistics facilities in the UK.

It has a dedicated rail freight terminal that runs directly to mainland Europe, direct access to the M60 and the Manchester ship canal and Manchester International Airport.

Meanwhile, UK snack maker Stream Foods was snapped up by South African own-­label cereal manufacturer Pioneer Food Group this month (August 1).

The deal was struck for a reported £7.5M and was in line with Pioneer’s strategy of “acquiring and bolstering Pioneer Foods’s product range in the UK with branded options”​, according to the firm.

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