Key Property Investments (KPI), a joint venture between leading UK developer St. Modwen and Kuwait based Salhia Real Estate Company, has sold Eastleigh Works, a multi-let train maintenance facility, to the Corporate Pension Fund clients of Savills Investment Management LLP, represented by international real estate advisor Savills. The estate was sold for £20.6 million, reflecting a net initial yield of 8%.

Eastleigh Works is a 47.4 acre (19.2 hectare) site primarily used as a locomotive, carriage and wagon repair works and predominantly let to Arlington Fleet Services Ltd. The site comprises 506,317 sq ft (47,038 sq m) of warehouse space, a three-storey office building and open storage areas.

Nick Kay, Development Director at St. Modwen said: “Since acquiring the site in 2002, we have added significant value over the years, taking it from a vacant complex of redundant buildings to a fully occupied, well managed rail-orientated industrial estate. We will re-invest the sale proceeds to help deliver our commercial development pipeline as we rebalance our portfolio towards a high quality industrial/logistics sector.”

Tom Scott, director in the investment team at Savills, commented: “We are delighted to have secured Eastleigh Works for our clients. The warehouse space is well let after considerable asset management undertaken by the previous owner, and there is considerable scope for more value add in the future.”

Lucy Winterburn, Director of Investment at Savills Investment Management, commented: “The purchase of Eastleigh Works is a strategic industrial land acquisition for our client with a recognised heritage of rail manufacture and maintenance. We are delighted to have secured this opportunity and relish the medium term redevelopment opportunity that it presents.”

CBRE has advised KPI on the asset throughout its ownership and acted on the sale.