Hansteen Holdings announced that it has exchanged contracts to acquire the ‘Spice’ portfolio of 17 industrial estates, located across England and Wales, on behalf of the Hansteen UK Industrial Property Unit Trust ll (“HPUT II”). The purchase price of £42.25 million (approx. €50.73 million) reflects a net initial yield of 7.7% rising to 8.25% on contracted rents. The acquisition will be part funded from a £25 million (approx. €30 million) increase in the existing HPUT ll facility with Royal Bank of Scotland (50%) and Barclays (50%). The vendor is Legal & General’s Industrial Property Investment Fund and the deal is expected to complete by the end of this month (February 2014).
Hansteen launched HPUT ll, in May 2013, with £107 million (approx. €128.5 million) of equity, one third of which was provided by Hansteen and the balance by Aviva Investors Real Estate Multi-Managers.
The portfolio comprises 137 units totalling 810,700 ft² (approx. 75,316 m²) across six estates in the South East; five in the Midlands; four in the North West; one in the South West and one in Wales. The current passing rent is £3.4 million a year which is contracted to rise to £3.7 million a year. The void rate is 4.7%.
Following this acquisition HPUT ll will have circa £120 million of assets, with a void rate of approximately 19%, yielding 8.25%, rising to 8.5% on contracted rents.
Mark Ovens, Director (UK) of Hansteen, commented: “We were attracted to the Spice portfolio by a combination of the quality of assets and the timing – at a point in the occupational market which is widely being interpreted as a point of inflection. Within our own portfolios, we are seeing new levels of confidence in occupiers and their decision making, a situation being recognized by valuers. ”
James Havery of Hansteen, added: "Spice is complementary to the existing HPUT II portfolio. It brings further good quality assets, a strong income profile and prospects for growth both through closer management of the property and wider occupational market factors. The properties fit naturally within Hansteen and our network of regional offices provides close proximity between asset manager and property. ”