Hansteen Holdings has exchanged contracts to acquire the Spice portfolio of 17 industrial estates, located across England and Wales, on behalf of the Hansteen UK Industrial Property Unit Trust ll (HPUT II).
The purchase price of GBP42.25m reflects a net initial yield of 7.7 per cent rising to 8.25 per cent on contracted rents.
The acquisition will be part funded from a GBP25m increase in the existing HPUT ll facility with Royal Bank of Scotland (50 per cent) and Barclays (50 per cent).
The vendor is Legal & General’s Industrial Property Investment Fund and the deal is expected to complete by the end of this month.
Hansteen launched HPUT ll in May 2013 with GBP107m of equity, one third of which was provided by Hansteen and the balance by Aviva Investors Real Estate Multi-Managers.
The portfolio comprises 137 units totalling 810,700 sq ft across six estates in the South East; five in the Midlands; four in the North West; one in the South West and one in Wales. The current passing rent is GBP3.4m a year which is contracted to rise to GBP3.7m a year. The void rate is 4.7 per cent.
Following this acquisition HPUT ll will have circa GBP120m of assets, with a void rate of approximately 19 per cent, yielding 8.25 per cent, rising to 8.5 per cent on contracted rents.
Mark Ovens, director (UK) of Hansteen, says: “We were attracted to the Spice portfolio by a combination of the quality of assets and the timing – at a point in the occupational market which is widely being interpreted as a point of inflection. Within our own portfolios, we are seeing new levels of confidence in occupiers and their decision making, a situation being recognised by valuers. ”