IO Asset Management has purchased 10 industrial estates with a combined value of €39m (£34m) on behalf of its multi-let industrial-focused segregated mandate for Tesco Pension Fund.
The acquired portfolio includes:
- The Hilldane Portfolio comprising seven estates in Horley, Newhaven, Okehampton, Redditch, Cardiff & Abergavenny acquired for a combined €20m (£17.43m) and a net initial yield of 7.0%
- Stroud Enterprise Centre, acquired for €2.9m (£2.5m)/6.15% NIY
- Ketley Business Park, Telford, acquired for €9.47m (£8.25m) / 6.70% NIY
- Bredbury 25 Trade Park, Stockport, acquired for €6.5m (£5.65m) / 6.15% NIY (including rent guarantees on vacant units)
IO was awarded a €45.9m (£40m) equity mandate by TPF earlier this year and, following the allocation of additional equity from the same source, has acquired around €74.6m (£65m) of multi-let industrial estates for the mandate to date. It is now using a debt facility from Santander to release equity from the existing portfolio in order to fund further acquisitions.
Angus Scott-Brown, Managing Director of IO Asset Management, commented: “These estates offer the opportunity for good initial income distribution coupled with active asset management opportunities and the prospect of both income and capital growth. The additional investment from TPF along with debt finance from Santander enables us to seek further acquisitions, and we have already identified a strong pipeline of similar opportunities across the UK as we seek to selectively grow and enhance the portfolio.”
