Tristan/AEW Europe Fund sells UK logistics center to Malaysian Pension Fund for £80 million (UK)

European Property Investors Special Opportunities, L.P. (EPISO), an opportunistic real estate fund co-advised by Tristan Capital Partners and AEW Europe, has sold a regional distribution center in Dartford, Kent in the UK to Malaysia's Employees Provident Fund for £80 million (approx. €90 million).

Dartford distribution center

The net initial yield on the transaction was 6.21%.

Ric Lewis, CEO, Tristan Capital Partners said: "The Dartford distribution center was EPISO's first acquisition in the UK and this deal is a great example of the fund's opportunistic investment strategy, as it bought close to the bottom of the market's cycle and then sold it on to an institutional investor who was attracted to the long lease and secure income profile that characterizes this investment."

The distribution center consists of three logistics warehouses developed by Prologis with a net lettable area of 62,534 m² and UK supermarket chain Sainsbury as the main tenant. Sainsbury's completed a £25 million fit-out of the center to make it one of the company's main distribution hubs, but weren't in occupation when EPISO purchased the asset in January, 2009 for £62 million.

The total rental income from the investment is £5,253,990 a year with two FRI leases to Sainsbury's for a term of 20 years from delivery in April, 2007. The net initial yield on the transaction was 6.21%.

Merrick Marshall, Head of Asset Management, UK and Germany, AEW Europe, said: "This deal demonstrates that there is still strong demand for investments providing secure long term income. We were able to achieve our fund objectives quicker than anticipated and at the same time the purchaser has acquired a trophy asset."

Source: Bellier Financial

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