Hansteen proposes to acquire a 26.3% stake in £460 million (approx. €532.77 million) Ashtenne Industrial Fund, and to become the new Asset Manager to the Fund.
Hansteen confirmed that it intends to take a 26.3% stake in the Ashtenne Industrial Fund. This includes the intended subscription for £42.5 million (approx. €49.2 million) of new units and (following the cancellation of Warner's listing) the intended purchase of Warner’s current 5.3% stake.
Hansteen's subscription for units is part of a wider equity raise by AIF for a total of £50 million (approx. €57.9 million), which is expected to result in the estimated Net Asset Value of AIF being between £245 million (approx. €283.8 million) and £250 million (approx. €289.5 million). The total costs to Hansteen are expected to be approximately £52 million.
Aviva Investors has announced today the intended appointment of Hansteen as asset manager to AIF, replacing Warner. The terms of the appointment are as follows. Hansteen will receive an asset management fee, together with a performance fee related to total returns, payable following the sale of all the properties in the Fund. Hansteen will also integrate the Warner asset management team into the Hansteen network to provide a property asset management platform, unique in its depth and breadth.
AIF was originally formed in July 2001 when Ian Watson and Morgan Jones, founders of Hansteen, were Joint Chief Executives of Ashtenne Holdings PLC. AIF owns over 14.6 million ft² (approx. 1.5 million m²) of multi let industrial properties in the UK. The portfolio has over 3,000 units, on 240 individual estates, with an annual rent roll of £43.5 million and a current vacancy of 18 %. At 30 June 2013, the gross asset value of the properties was £460 million.
At the same time as its appointment as asset manager, it is intended that Hansteen will become asset manager of the APIA Regional Office Fund (‘APIA’) and Norwepp Limited Partnership (‘Norwepp’). APIA owns eight regional office properties, including Sunlight House in Manchester and Yorkshire House in Leeds, and all of the assets are expected to be sold by March 2015. Norwepp is a joint venture between the Homes and Communities Agency (formerly North West Development Agency) and AIF. Norwepp owns industrial property and two office properties in the North West of England.
The equity raise and the new management contract will be subject to ratification by unit holders in the Fund at an EGM to be held on 12 September 2013. Approximately 83% of the eligible unit holders have given irrevocable undertakings or letters of intent in support of the transaction. Approval requires 75% in support. Hansteen’s percentage holding and investment in the Fund detailed above is based on the expected outcome of the EGM.
Following its appointment as asset manager, Hansteen will have approximately 44 million ft² of property wholly owned or under management with a value in excess of £1.6 billion.
Morgan Jones, Joint Chief Executive of Hansteen, said:
“We are delighted with this transformational opportunity, which would more than double the properties we have under management in the UK, would complete our UK management platform and would be both NAV and earnings enhancing. Ian and I are also personally pleased at the prospect of being reunited with our former business.”