As the number of investors seeking UK commercial property assets continues to rise steadily, domestic firms keen to grab a slice of the action are having to act increasingly quickly when opportunities reach the market. For Clearbell Capital, this has resulted in the acquisition of two major portfolios spanning numerous sectors across the length and breadth of the country.
The first portfolio acquired on behalf of a client was the Amber portfolio from Aberdeen Asset Management, which includes 29 retail, industrial and office assets across England and Scotland.
At a total cost of £153 million, the transaction was financed with £70 million equity and a debt of around 65 per cent from Wells Fargo, and was conducted in association with Franklin Templeton Real Asset Advisors and an additional co-investment partner.
In total, the portfolio measures 2 million sq ft in size and is comprised of 38 per cent retail assets, 42 per cent industrial assets and 20 per cent office space, with more than half of the assets located in the south of England. At present, it boasts a vacancy rate of just 4.5 per cent and brings in an annual rental income of £13.2 million, although Clearbell has already identified a number of asset management opportunities which may elevate the value in the long term.
Clearbell Capital partner Rob West believes that the portfolio will prove highly profitable as improvements are conducted in the coming months.
He says: “This portfolio not only has an existing strong cash income, but also offers the opportunity to apply our asset management skills in the letting of nearly 100,000 sq ft and the redevelopment of key sites.
“Given the large equity requirement, we are delighted that we were able to allow two existing investors to co-invest alongside the fund.”
Clearbell also acted quickly to snap up the Stephenson portfolio, hereby to be known as the Polaris portfolio, from Stirling Investments Ltd in a deal worth £50.75 million. The deal represents a net initial yield of 11.2 per cent and was financed with £27 million equity, with debt from PBB.
Composed of 10 per cent office space, 67 per cent industrial assets and 24 per cent distribution warehousing, the portfolio has the advantage of being well placed to capitalise upon the growing demand for warehousing and logistics assets in the UK regions. It currently brings in an annual rental income of £6 million and has 23 tenants, the largest being Jeyes, Silentnight, Garnett Dickinson and DavyMarkham.
Unlike the Amber portfolio, the assets in this portfolio are primarily in the north of the country, with only one found in the south. Mr West hopes that the recent manufacturing boom in the North West, North East and Yorkshire will help to boost the rental value of the Polaris portfolio still further.
He continues; “With the acquisition of the Polaris portfolio, we are increasing our industrial exposure at an attractive initial yield which is also driving cash on cash returns.
“This acquisition also aims to take advantage of the region’s potential, and we are able to diversify our portfolio and strengthen our long-term profitability and offering.”
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