Rockspring Property Investment Managers, on behalf of Rockspring Hanover Property Unit Trust, has acquired the South Portfolio, a multi-let industrial and office portfolio, for a total consideration of GBP62 million from the Ashtenne Industrial Fund (AIF), reflecting a net initial yield of 7.5 per cent.
AIF is managed by Hansteen, which also has a 36.7 per cent interest in the fund.
The South Portfolio comprises 10 multi-let industrial estates and one office building in the South East of England, totalling 171 units and an area of nearly 900,000 sq ft. Collectively the assets are let to a diverse range of approximately 120 tenants including HSBC Bank, Virgin Media and Halfords Autocentres, with a current occupancy rate of 91 per cent. The portfolio currently produces a net rental income of GBP4.9 million per annum.
Paul Crosbie, assistant director at Rockspring, says: “The South portfolio is a good example of the type of deal we have been targeting for the ‘income portfolio’ of Hanover, offering an accretive yield to the fund’s distribution and the ability to generate higher returns through an increase in rents across the portfolio.
“The portfolio comprises a selection of well-located, edge of conurbation estates across the South East that are surrounded by higher value alternative uses. The assets provide an appealing, diverse income stream that will respond well to the application of capital expenditure and active asset management, such as re-gearing existing leases, letting vacant space and potential for development in the long-term. We are confident that the implementation of these initiatives will deliver outperformance and generate strong returns for our investors.”
Rockspring was advised by Fletcher King and Caisson on the transaction, while Hansteen was advised by DTZ.