M7 Real Estate, the pan-European investor and asset manager, announces that it has completed the acquisition of seven regional assets with an aggregate value of €26.5m (£23.7m) on behalf of M7 Real Estate Investment Partners VI. The Fund is now fully invested with a total portfolio value of c. €34.4m (£30.8m). M7 REIP VI was launched in December 2016 to target multi-let, high yielding assets with attractive income profiles in key UK regional locations, underpinned by supportive fundamentals including the growing need of SMEs for flexible and high quality space outside of London.
The seven assets have been acquired in separate transactions, the largest of which is Felaw Maltings, a 108,879 ft² office asset in Ipswich, from Kames Capital for €9.8m (£8.8m), reflecting a net initial yield of 8.7%. The substantial Victorian redbrick building, known locally as Ipswich’s best multi-let office property, was converted into office use in the 1990s, and is fully let to a range of tenants including the Suffolk Enterprise Centre, recruitment specialists VPSS and engineering, environmental and building control consultancy MLM Group.
- III Acre Princeton Drive, comprising three 90% occupied, modern Grade A office buildings totalling 32,913 ft², at the Teesdale Business Park in Stockon on Tees for €3.4m (£3m), reflecting a NIY of 11.7%;
- Rivermead Court, comprising two fully let, two-storey, multi-let office buildings on the Kenn Business Park in Clevedon for €3.53m (£3.16m), reflecting a NIY of 11%;
- Oldham Business Centre, a 45,367 ft² office property in Oldham, Greater Manchester for €3.8m (£3.4m);
- Merchant Gate at 1 Burbage Square in Wakefield, a 26,295 ft² mixed-use office and retail development for €2.35m (£2.1);
- The Chilterns in Stokenchurch, Wycombe in Buckinghamshire, a fully let 10,478 ft² modern office development for €2.07m (£1.85m), reflecting a NIY of 8.1%; and
- Cromwell House in Lincoln, a 15,727 ft² office property for €1.56m (£1.4m).
Charlie Alcock, a Director at M7 commented: “The portfolio is currently yielding around 10% and, with average rental levels below historic averages, there are a number of potential opportunities to further enhance the income profile in the medium term.”
