Orchard Street Investment Management, representing an unidentified pension fund, has acquired a 34,000-m[sup]2[/sup] industrial real estate asset in the UK for £30 mln (nearly EUR 36 mln). The vendor in the off-market deal is Max Property Group, advised by Prestbury Investments.
Orchard Street Investment Management, representing an unidentified pension fund, has acquired a 34,000-m2 industrial real estate asset in the UK for £30 mln (nearly EUR 36 mln). The vendor in the off-market deal is Max Property Group, advised by Prestbury Investments.
The Castle Industrial Estate, High Wycombe formed part of the Industrious Portfolio, and is let to tenants including John Lewis, Geodis, Biffa and R H Amar, producing a rent of £2.85 mln per annum.
The transaction reflects a net initial yield of 8.85%. The net proceeds are 5.6% above Max's March 2010 valuation and shows £15.8 mln of cash will be released for new acquisitions after repayment of bank debt.
Gary Felce of Orchard Street commented: 'We are very pleased to acquire this South East estate which offers a good balance of income and management opportunities in a market with limited supply.'
Mike Brown of Prestbury said that since purchasing the asset last October Max has secured early renewal of leases and new lettings on over 18,600 m2 of the estate.
'Whilst we were not seeking a disposal, with a lot size of over £30 mln reflecting £87 per square foot Castle Estate is not a natural fit with the remainder of the Industrious portfolio which comprises 80 higher yielding properties with an average lot size of under £3 mln and acquired at about £30 psf,' Brown added.
DTZ advised Orchard Street. Max was advised by Franc Warwick.