Catalyst Capital, the European real estate investment and asset management firm, has acquired a portfolio of properties in the UK for approx. €60.4m (£51.5m). Catalyst’s second European real estate fund, Catalyst European Property Fund II (CEPF II), has purchased the Meteor portfolio. The net initial yield is around 9%.
The portfolio comprises 23 properties (12 retail, seven industrial, two office and two mixed-use), totalling 794,000ft² and spread across the UK. There are 88 tenants, producing gross annual rental income of £5.44m. The vacancy rate is 7.2% and the weighted average unexpired lease term is 2.5 years to break and 4 years to expiry.
Catalyst was advised by JLL and the vendor by Gerald Eve.
Guy Wilson, a partner of Catalyst Capital, said: “We are delighted to have completed the purchase of this high-yielding portfolio. The portfolio offers a combination of high income return and the ability to add value though asset management. Our cross-sector asset management capabilities mean that we are well suited to purchasing and running portfolios of this nature”.
John Rodgers, partner at Gerald Eve, said: “The Meteor Portfolio sale generated considerable purchaser interest, demonstrating the depth of investor demand for regionally-located granular assets. The disposal was part of a growing trend of real estate vehicles looking to prune their tail, creating a more efficient residual fund structure and aligning the portfolio with the wider strategy”.
Catalyst announced in June the first close of CEPF II, a real estate fund targeting €1bn of investments. Catalyst has already acquired around €680m of real estate across Europe for CEPF II. Among the transactions are the Regatta and Eva portfolios, which total 34 properties, in the UK, Project 10, a €200m German office and retail portfolio, and three high-quality office buildings in established business districts of Paris.
CEPF II invests in the office and retail sectors and, geographically, in the countries in Europe where Catalyst has an established presence, which are the UK, France, Belgium, Germany and Poland, where Catalyst believes there is the potential to source attractive value-creation opportunities and capitalise on the market dislocation between prime and secondary assets. It is targeting a diversified portfolio of income-producing assets and development and refurbishment opportunities.
