Bradda Capital completes GBP30m of transactions for its two evergreen funds
Bradda Capital, the UK real estate investment adviser, has completed GBP30 million of transactions for its two evergreen real estate funds.
Bradda has acquired four industrial and office properties in Warrington, Glasgow, Gateshead and Birmingham for GBP16.7 million for its second fund, which was launched a year ago with seed funding of GBP30 million from investors in its first fund and is targeting a capital raise of GBP150 million. It has also sold six assets for more than GBP16 million from its first fund launched in 1998, reaching a net asset value of more than GBP200 million. Investors in the two funds are principally family offices.
David Phillips, Managing Director of Bradda Capital, says: “The four properties we have acquired are high-quality, low depreciating investments with very secure income and better-than-average rental growth prospects, which we secured at net initial yields of more than 6 per cent.
“The five assets we sold achieved very good prices, mainly reflecting yields of less than 5.7 per cent. That reflected significant pent-up occupier and investor demand for logistics assets linked to e-commerce, as well as very strong investor demand for relatively high-income yielding assets of a size that appealed to smaller institutions and private investors.
“We believe our sector-agnostic, absolute returns approach affords us the flexibility to move from one sub-sector to another as pricing and risk-adjusted returns dictate. Sticking to the basics of high-quality properties in large conurbations with sustainable rents from tenants who are committed to their locations, serving a real purpose in today and tomorrow’s economy has certainly proven to be a good long-term investment strategy over the last 23 years”.
The four properties just acquired for the second fund, which generate a blended net initial yield of 6.3 per cent and have a combined weighted average unexpired least term of more than 11 years, are:
- Warrington: 520 Europa, a 44,750 sq ft warehouse at Gemini Business Park, let to DX Network Services, for GBP3.65 million, reflecting a net initial yield of 6.6 per cent net; Bradda was advised by JLL and the vendor was advised by Avison Young
- Glasgow: a new 28,017 sq ft warehouse at Clyde Gateway East Business Park, let to Torishima, for GBP3.2 million, reflecting a net initial yield of 6.04 per cent; Bradda was advised by Ryden and the vendor, Clyde Gateway Developments, was advised by Avison Young
- Gateshead: a newly refurbished 51,800 sq ft warehouse at Princes Park, Team Valley, let to Thermodynamix, for GBP3.7 million, reflecting a net initial yield of 4.8 per cent rising to 6.5 per cent in April 2021 after a fixed increase in the rent; Bradda was advised by The Estate Office and the vendor by Naylors Gavin Black
- Birmingham: Three Devon Way, a new 21,624 sq ft office building at Longbridge Technology Park, let to Barnett Waddingham, for GBP6.18 million, reflecting a net initial yield of 6.25 per cent; Bradda was advised by JLL and the developer, St Modwen, was advised by Savills
The five assets that were sold from the first fund are:
- Edinburgh: a 30,050 sq ft warehouse at South Gyle, let to UPS, for GBP4.1 million, reflecting a net initial yield of 4.8 per cent; Bradda was advised by Ryden and the buyer was advised by JLL
- Haywards Heath: Chalegrove House, a 10,841 sq ft office building, let to PNC Financial Services, for GBP4.025 million, reflecting a net initial yield of 5.7 per cent; Bradda was advised by JLL and the buyer was advised by Allsop
- Leamington: a 22,000 sq ft light industrial unit at Sydenham Industrial Estate, let to Elizabeth The Chef, for GBP1.85 million, reflecting a net initial yield of 5.6 per cent; Bradda was advised by Wareing and Co -
- Tonbridge: Fosse House, a 10,000 sq ft office building, let to Charity Bank and First Actuarial, for GBP2.55 million, reflecting a net initial yield of 7.2 per cent; Bradda was advised by JLL and the buyer was advised by Allsop
- Tonbridge: land of just more than one acre with existing planning consent for nine town houses and three apartments sold to Churchill Retirement Living, subject to planning consent for retirement living apartments