IO Asset Management has bought six multi-let industrial estates on behalf of Tesco Pension Fund (TPF) for a total of €31.2m (£27.3m). The estates comprise 428,000 ft² of space and their purchase reflects an average net initial yield of around 6.25% and a reversionary yield in excess of 7.5%, with a 16% vacancy.
These are the first purchases following IO’s appointment by TPF on a €68.6m (£60m) segregated mandates to buy and hold multi-tenanted industrial and urban logistics estates with a value of €2.3m (£2m) to €11.4m (£10m).
The purchased properties are:
- Pembroke Court in Runcorn comprises 150,000 ft² was purchased at a net initial yield of 5.3%
- Bishops Court in Warrington (110,000 ft²/NIY 6.1%)
- Severn Link Distribution Centre in Chepstow (80,000 ft²/NIY 6.7%)
- Old Mill Lane Industrial Estate in Mansfield (36,000 ft²/NIY 6.7%)
- Centurion Court in Milton Keynes (24,000 ft²/NIY 6.3%)
- Thames Trading Estate in Salford (31,000 ft²/NIY 6.7%)
Angus Scott-Brown, Managing Director of IO Asset Management, commented: “These purchases represent just under half of the original mandate to acquire multi-let industrial estates for Tesco Pension Fund. Our focus is on finding high-quality properties with active management potential, and we are continuing to identify similar opportunities across the UK.”