UK Commercial Property Trust Limited, managed by Ignis Asset Management, announced that it has acquired a portfolio of three multi-let principally industrial park assets from SEGRO plc for a total consideration of £60.51 mln. (72.45 mln.), reflecting a net initial yield of 7.34%. The three sites provide a combined total floor area of 549,413 ft² (50,900 m²) and a total income of £4.67 mln. per annum.
The occupancy rate across all three estates is approximately 98%, with units let to a mix institutional grade tenants including Smiths News Trading, UPS Ltd and Volkswagen Group UK Ltd.
The average weighted lease length across the portfolio is nine years and one month.
The transaction will be financed primarily through the use of part of the £150 mln. facility agreed with Barclays Bank Plc in May 2011. The acquisition provides UKCPT with greater exposure to multi-let industrial assets, consistent with one of the Company's strategic aims.
The Company also believes that there is the potential for income and value growth through active asset management.
The portfolio comprises:
* Emerald Park East, Emersons Green, Bristol a modern industrial estate developed between 2000 and 2004, located close to Junction 19 of the M4, to the north of Bristol.The estate currently generates income of £1.71 mln. per annum from 235,635 ft² across 17 units, let to tenants including Knorr Bremse Systems, Sungard Availability Services and Smiths News Trading Ltd. Average unexpired lease length is four years three months to breaks (eight years six months to expiry).
* Gatwick Gate Industrial Estate, Crawley A mid 1980`s industrial estate located on Charlwood Road, to the immediate south of Gatwick Airport. The estate generates income of £1.11 mln. per annum from 144,944 ft² of space across nine units, let to tenants including Signet Group Ltd and Cooper Callas Ltd. Average unexpired lease length is five years to expiry and break.
* Motor Park, Eastern Road, Portsmouth This group of car showrooms representing the principal automotive dealership location in the Portsmouth area, offers brands including Mercedes-Benz, Audi, BMW, Volkswagen, Mini, Chrysler and Jeep. The park generates income of £1.84 mln. per annum from 162,661 ft² of space across ten units, let to tenants including Volkswagen Group UK Ltd, Pentagon Ltd and Affinion International. Average unexpired lease length is 12 years two months to break (twelve years nine months to expiry).
Christopher Hill, Chairman of UKCPT, commented: "This transaction fits well with our strategy of acquiring good quality assets that, particularly in these uncertain economic times, both complement our existing portfolio and offer strong, defensive income characteristics. This portfolio is also attractive as it offers us the potential to grow value through the application of our disciplined and focused approach to asset management. The new financing facility that we agreed with Barclays last year provides us with comfortable headroom to make acquisitions when we find an attractive opportunity such as this, and we continue to look for transactions to grow and enhance our portfolio further."
UKCPT was represented by GVA and JLL represented SEGRO plc in the transaction.
Source: FTI Consulting