Hansteen Holdings (LSE: HSTN), the UK and Continental property investment company, announces that it has completed the purchase of a portfolio of six logistics properties in Germany, from Dexus Funds Management Ltd., for 26 million. The purchase, which was funded from existing cash resources, reflects an initial yield of 13.77%.
The properties, located in Langenweddingen, Friedewald, Knetzgau, Unna and Langenfeld (two), are all good quality distribution warehouses suited to modern occupational requirements, all with excellent motorway connections and total 127,000 m² of built space.
The price represents a capital value per ft² of just £15.25 (approx. 18.9), considerably less than 50% of replacement costs. The portfolio is 95% occupied with a current rent roll of 3.58 million, representing a low average rent of 2.90 per m².
Commenting on the acquisition, Ian Watson, Joint Chief Executive of Hansteen, said: "This is a slightly unusual transaction for Hansteen given the high occupancy and the possibility that one or two of the tenants will vacate over the next year or two. However, we believe the portfolio represents fundamentally great value on a vacant possession basis.
"The fact that in addition it combines a high running yield, off low rents, with potential to add value through asset management initiatives and development opportunities made it irresistible."
Source: Tavistock Communications