UK Commercial Property Trust Limited, the largest Guernsey based, UK focused commercial property trust, announces that it will invest a total of £48 million (approx. €57.7 million) in three properties at the Aberdeen Gateway Business Park, south side of Aberdeen.
The properties are currently being developed by Muir Group and on completion will generate a net initial yield of 6.0% with the benefit of guaranteed rental uplifts, providing a level of inflation-proof income. The average lease length will be 19 years.
The investment includes:
- The forward funding of a 181,050 ft² (approx. 16,820 m²) warehouse development with an expected completion date of December 2014, which has been pre-let to Total E&P; Work is now underway following the acquisition of the site in mid-January;
- The forward purchase of a 60,000 ft² (approx. 5,574 m² mixed warehouse and office property, due to be completed in August 2014 and let to Tetra Technologies;
- The forward purchase of a 25,000 ft² (approx. 2322 m²) office building, due to be completed in July 2014 and let to Ensco Services Ltd.
The tenants are all strong covenants, being well-established companies operating in the energy sector.
The acquisition of these properties will, on completion of the properties, increase UKCPT’s weighting to the Industrial sector to 24% of the portfolio, increasing exposure to a sector that the management team has identified as offering attractive income and value growth prospects. The Aberdeen economy, benefiting from the global outreach of the energy and oil and gas industries, is also one of the most robust in the UK, and provides further geographic diversification for the portfolio.
Robert Boag, Senior Investment Director at Ignis Asset Management, commented:
“We believe that Aberdeen industrial property, which has shown robust performance underpinned by long term demand particularly from the energy sector, is one of the most attractive sub-markets in UK commercial property and this is a unique opportunity to acquire three very high quality industrial and office developments within an attractive business park environment. The acquisitions will provide long term, secure income, in line with our strategy of generating income and valuation growth on behalf of our shareholders.”
Source: FTI Consulting