Stobart completes sale of its Distribution Centre at Carlisle Airport for £16.925m
The distribution centre asset was held in SAD1 Stobart Air Development 1 Limited, a company which has been sold in this transaction.
Construction of the distribution centre, which was developed in house by the Group's civil engineering specialist Stobart Rail, was completed in September 2015. Carlisle Airport covers 460 acres of land, of which 212 acres is required to operate the airport. Stobart Group acquired Carlisle Airport in May 2009 for £9.9m in order to develop the remaining 248 acres for logistics, aviation-related and other purposes as well as developing passenger services at the airport. The distribution centre occupies 19 acres. The Group believes the development and sale of the first distribution centre will be the catalyst for future development at Carlisle Airport, which will attract inward investment and create sustainable jobs for the Cumbria area.
The Group has sold the distribution centre to Gramercy Europe Limited ('Gramercy'), a real estate investment fund for £16.925m and entered into a lease with Gramercy for the entire property for an initial term of 20 years. In all, 260,000 sq.ft. is sub-let to Eddie Stobart Limited on a 20 year lease to provide storage space to service two long-term distribution contracts. The distribution centre was held in the Group's balance sheet at £14.8m and at the date of the Group's last published results it had not yet contributed revenue.
The Group is considering plans to introduce passenger services linking London Southend, Dublin and Belfast Airports. Stobart Group is working with the Civil Aviation Authority on runway and terminal safety designs in advance of refurbishment and the Group is also working with its joint venture company, Stobart Air, a regional carrier with the intention of operating flights to these locations.
The Group intends to return the surplus proceeds of asset realisations to shareholders and will announce its plans in that regard along with its results for the year ending 29 February 2016.
This transaction has justified the Group's perseverance, through a prolonged planning process, generating an excellent return and indicating that the Group's investment in Carlisle Airport will generate an attractive return for the Group's shareholders, in line with its stated strategy.
Chief Executive Andrew Tinkler commented: "We are pleased to have concluded this first phase deal with Gramercy. The transaction is in line with our strategy of realising value from mature assets and creating value for shareholders. We believe that this development will attract further inward investment at Carlisle Airport, securing and creating jobs in the area by offering cheaper logistics solutions at a location close to the Lake District and the border with Scotland. There is also the opportunity for Stobart Air to create passenger air services, attracting business customers who require fast, effective transport links and giving tourists more efficient access to Cumbria and South West Scotland."
