Hansteen Holdings plc and the Hansteen UK Industrial Property Limited Partnership have completed the acquisition of the entire property assets from The Spencer Group of Companies for £150 million gross (approx. 180 million gross) (£147.1 million net).
Hansteen, the investor in UK and continental European property, is manager of, and co-investor in the Fund.
The portfolio comprises some 88 assets totaling 4.1 million ft² of predominantly industrial property located across the UK.
Hansteen has acquired 44 of the assets with a current rent roll of £6.0 million (after deduction of head rents) and a vacancy rate of 41.6% for £75.2 million (gross), representing an initial yield of 8.0%, or 8.51% excluding development land, satisfied by £33.9 million of cash from existing resources and £41.3 million of new debt facilities provided by Lloyds Banking Group.
The Fund has acquired 44 assets, with a current rent roll of £6.4 million (after deduction of head rents) and a vacancy rate of 17.2%, for £74.8 million (gross), representing an initial yield of 8.5%, utilizing existing and new debt facilities provided by Royal Bank of Scotland.
Following this transaction, assuming prudent gearing of 50% LTV, Hansteen has firepower of approximately £300 million for further acquisitions. The Fund is now effectively fully invested with gross assets of £166 million and debts of £76 million.
The overall portfolio comprises:
- 4.1 million ft² across 68 freehold; 13 long leasehold; and 7 part freehold, part long leasehold properties. Hansteen have acquired 2.4 million ft² and the Fund has acquired 1.7 million ft²
- 65 properties in England (76.3% by value); 22 in Wales (22.0% by value); and 1 in Scotland (1.7% by value)
- 37 acres of development land, all of which has been acquired by Hansteen
- 87.9% by value in industrial; 6.2% in offices; 3.0% hybrid units and 2.9% in development land
- Net annual rent receivable of £12.4 million after deduction of head rents equating to an overall initial yield of 8.3% (8.51% excluding development land)
- Current vacancy rate of 31.7% with a total ERV of over £16.4 million per annum.
Morgan Jones, Joint Chief Executive of Hansteen commented: "The portfolio is highly compatible with Hansteen's intensive management approach and the team's experience across the UK market.
"It has strong fundamentals and a high vacancy rate providing a great opportunity to create significant added value through improving occupancy and imposing our own approach."
Ian Watson, Joint Chief Executive of Hansteen, added: "This substantial purchase completes the Fund and will materially add to Hansteen's earnings and future growth potential without significantly reducing our available firepower."
Source: Tavistock Communications