Rockspring Property Investment Managers has invested €61.5m (£54m) across three individual transactions in the UK, comprising two reversionary office assets in London and a Holiday Inn hotel in York City. The properties have been acquired at a combined net initial yield of just under 5%.
In London, Rockspring has purchased Mott MacDonald House, a 64,000 ft² office property in Croydon, for €24.1m (£21.2m) from Aviva Investors. Arranged over ground and six upper floors, together with 31 on-site car parking spaces, the asset is fully let to global management, engineering and development consultancy Mott MacDonald with a 6.7-year WAULT to expiry.
The second office asset is the Bath and Cayton building, which is less than a five-minute walk from Old Street Underground Station and has been acquired from City, University of London for €19.7m (£17.3m). It is a 23,158 ft² warehouse-style building, with a basement, ground and five upper floors, that is currently fully let to Moorfields Eye Hospital NHS Foundation Trust. Like Croydon, Old Street has undergone significant transformation and is now a recognised creative and tech hub on the City of London fringe, 10 minutes’ walk from the new Elizabeth Line entrance at Liverpool Street Station.
Finally, the company has acquired a 148 bed Holiday Inn hotel in York City Centre for circa €17.1m (£15m) for its outperforming Rockspring Hanover PUT from Quidnet Capital and Colony North Star. The asset is let on a long 50 plus, FRI lease to Kew Green, who fully renovated the all the bedrooms between 2015 and 2017, and intend to refurbish the food and beverage area of the hotel next year. Due to its popularity as a tourist destination and the demand/supply imbalance of hotel accommodation, York has the fourth highest RevPar in the UK. The acquisition accords with the funds' strategy of reducing risk with a long lease, good tenant and strong location, whilst gaining access to an ‘alternative’ sector.
Jamie Younger, Head of UK Transactions at Rockspring said: "These transactions demonstrate our highly selective approach to stock picking, which is underpinned by in-depth research on the fundamentals of each asset. Each of the acquisitions is located in performing locations with income growth potential, either through asset management or performance linked long-term leases. With a healthy pipeline of further acquisitions in the UK, where we believe there is still value to be found, we look forward to announcing further transactions over the short to medium term."