Hansteen has acquired two industrial assets in Derbyshire and the North East for a combined total of £41.1 million.
The UK and continental European industrial property investor has firstly exchanged contracts with DV4 Properties West Hallam Ltd to acquire West Hallam Industrial Estate in Ilkeston for a total of £27.3 million. Completion is due to take place today and the price reflects a triple net initial yield of 6.2 per cent.
West Hallam Industrial Estate comprises 106 buildings across a site measuring 118 acres, and in total provides 1.28 million sq ft of space. It benefits from large areas of open storage land and is currently let in its entirety to Norbert Dentressangle, which was acquired in June 2015 by top ten global provider of supply chain solutions XPO Logistics.
The estate generates a total annual rental income of £1.7 million, £1.2 million of which pertains to a separate eight year FRI lease on 777,556 sq ft across 26 buildings. However, an open market rent review is scheduled for October of this year, so this total could well rise.
Meanwhile, the balance of the estate is subject to a management agreement with the tenant until the 30th of October 2018, whereby a fixed fee of £500,000 per annum and 50 per cent of revenues received over £1 million per annum apply.
Managing director Paul Goswell of Delancey, who advised DV4 on the deal, says; “The investment has performed well during DV4’s ownership, but going forwards the fund will be focusing on the prime distribution sector through its db symmetry platform and it was the right time to sell West Hallam.”
The other asset acquired by Hansteen is Belasis Business Park in Billingham, Teesside, for a total of £13.8 million. Completion on this deal is scheduled for Tuesday the 29th of September, and the price reflects a net initial yield of 7 per cent which will rise to 8.3 per cent on contracted rent.
Belasis Business Park consists of 33 purpose-built detached and terraced units totalling 129,136 sq ft. It is presently 84 per cent let to 19 occupiers who provide an annual contracted income of £1.15 million and include big names such as Tracerco, ABB Group and Worley Parsons.
UK director of Hansteen, James Havery, believes that the park offers numerous opportunities to engage in active asset management initiatives.
He says; “At Belasis, given a good proportion of the park is securely let, our local asset management team can concentrate on the 16% void and the shorter unexpired terms.
“The composition of the asset provides us with a variety of exit routes; be that sales of long dated investments, sale to occupiers or retaining as a whole and working through the void.”
Joint Chief Executive of Hansteen, Ian Watson, adds; “We are very pleased to have acquired these two assets so soon after having raised equity from our shareholders.
“Both assets offer excellent income security together with the opportunity to enhance returns through asset management.”
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