UK - Cubemaker Partnership, the joint venture between the BP Pension Fund and Cube Real Estate, has acquired three commercial real estate assets from television company ITV for £11.3m (€12.9m).

It is the fourth deal made by the joint venture, which has £100m to spend and is 77% funded by the BP Pension Fund.

The Staffordshire County Pension Fund has also gained exposure to Cubemaker after Cube Real Estate raised third-party capital from a number of investors to fund the remaining stake.

The properties are based in three regional UK centres - Birmingham, Bedford and Bristol - and follow three previous acquisitions, including the Chrysalis Building in West London, formerly owned by Chrysalis Music and previously known as the Phoenix Brewery, which was bought for £6.8m.

Cubemaker also acquired an industrial estate in Leeds and retail assets in Cobham.
The joint venture is designed to supplement the BP Pension Fund's core real estate portfolio with higher returning, smaller opportunistic investments in the UK.

Tim Hayne, head of property at the BP Pension Fund, said Cubemaker was specialising in the "sub-£10m market for stock that requires intensive management", with a strategy that primarily involves "rebranding, refurbishing, moving tenants around, re-letting and then exiting".

Cubemaker is approximately a third of the way through its investment programme, although progress has been hampered somewhat by a difficult market.

"With the benefit of hindsight, the progress we made in 2009 was a little disappointing," Hayne said. "We have been quite frustrated by unwilling sellers."

The BP Pension Fund's in-house real estate operation, which concentrates only on core real estate in the UK, has been similarly frustrated, he added.

The pension fund's most recent investment was the acquisition of the Nottingham Belfry Hotel for £14m, let to Q Hotels until 2028.

The deal follows a number of hotel investments for the pension fund this year, including two Travelodge hotels in Manchester and Liverpool, for £12.3m and £10.1m, respectively.

"Along with others, we have spent more time in 2010 looking at the 'other' category for propositions: hotels, private hospitals, care homes, etcetera," Hayne said.

"I'm still hopeful of getting another £100m into the market by year-end, which will take our portfolio over the £1bn mark, which was our long-term target set in 2007."
 

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