Delin Capital Asset Management, (‘DCAM’ or the ‘Company’) has invested a further £81 million in the UK market through two separate transactions. The acquisitions have been made on behalf of its €400 million Capital Preservation Portfolio I, (‘CPP I’ or the ‘Fund’), the Company’s inaugural core plus logistics fund.
In the first transaction, DCAM has acquired a portfolio of five prime distribution assets covering over 1 million ft² (approx. 95,500 m²) of space for circa £66 million from InfraRed Capital Partners Limited (‘InfraRed’). The purchase price reflects a net initial yield of 7.2% after allowing for rental guarantees.
Two of the assets are located within the main distribution hubs of Magna Park and Swift Valley Park within the UK’s logistics ‘Golden Triangle’, and two in prime North East distribution parks. The final smaller asset is located in close proximity to Birmingham and its motorway network.
With a weighted average lease length of 7.8 years, the assets are let to a variety of strong covenants including DHL, Scotts Mircale-Gro and BTC Active Wear, all of whom operate the buildings as national distribution centers.
DCAM was advised by Jones Lang LaSalle and CMS. InfraRed was advised by GVA and Taylor Wessing.
In a second, separate transaction, DCAM has acquired a modern single-let standard distribution warehouse in Middlewich from receivers, Allsops for c. £15 million, reflecting a net initial yield of c. 7%.
Located on the M6 corridor which links Manchester and Liverpool with Birmingham, and with good accessibility to both the Midlands and North West regions, the 353,000 ft² (approx. 32,000 m²) warehouse is let to Kuehne and Nagel Ltd on a full insuring and repairing lease expiring in 2017. The tenant is currently operating a FIAT contract from this site.
DCAM was advised by CBRE and CMS. DLA Piper acted for Allsops.
Christian Jamison, Chief Executive Officer of DCAM commented: “We are very pleased to have made such a significant step forward in terms of growing CPP I’s investment in the UK market, which continues to be very competitive. By executing both these transactions within 10 days of commencing due diligence, we have demonstrated our capability to move quickly and decisively for attractive acquisitions. We continue to search for value and we will now look to add leverage to our UK portfolio as we have done recently with our Dutch portfolio.
“All these assets satisfy our investment criteria of offering high quality modern space in strong UK locations. Although the majority of the space is long let, these assets also offer some opportunity for asset management and therefore the potential to deliver value growth through new lettings or re-gears in an improving occupational market.”
Source: FTI Consulting