IO Asset Management has purchased 10 industrial estates with a combined value of £34m on behalf of its multi-let industrial-focused segregated mandate for Tesco Pension Fund.
The transactions include:
- The Hilldane Portfolio comprising seven estates in Horley, Newhaven, Okehampton, Redditch, Cardiff & Abergavenny: acquired for a combined £17.435m and a net initial yield of 7.0%
- Stroud Enterprise Centre: acquired for £2.5m/6.15% NIY
- Ketley Business Park, Telford: acquired for £8.25m / 6.70% NIY
- Bredbury 25 Trade Park, Stockport: acquired for £5.65m / 6.15% NIY (including rent guarantees on vacant units)
These latest acquisitions reflect a blended Net Initial Yield of 6.65% and a Reversionary Yield of 7.60%.
IO was awarded a £40m equity mandate by TPF earlier this year and, following the allocation of additional equity from the same source, has acquired around £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.”
