Hines’s European value-add fund has expanded its UK presence with the acquisition of four industrial estates from LondonMetric Property.
Hines European Value Fund 2 (HEVF 2) has invested £40.5m (€47m) to buy the 435,000sqft portfolio of multi-let industrial estates in the West Midlands.
The four estates comprise a 47-unit mix of light industrial, trade and mid-box warehousing. Three of the estates – located in Kingshill, Redwood Park and Shenstone – benefit from proximity to Birmingham City Centre, while the fourth asset, Triton Park, is located in Rugby.
Paul White, HEVF 2 fund manager, said: “We see the UK industrial and logistics marketplace as one of the best examples in Europe of the sector’s strong fundamentals, with significantly adjusted entry pricing. This latest transaction reflects our conviction in the vital importance of the small to mid-box industrial and logistics property market to the regional and national UK economy.
“We aim to continue acquiring attractively priced, income-producing industrial assets across the UK where we can add value over time through proactive asset management and accretive capital expenditure on ESG initiatives.”
LondonMetric said the properties were previously acquired as part of the Mucklow acquisition in June 2019 for an allocated price of £30.9m, adding that the sales crystallise an ungeared internal rate of return of 13% and are in line with the March 2023 book value.
Andrew Jones, chief executive of LondonMetric, said: “These assets have delivered returns materially above our initial expectations from a combination of rental growth and yield compression. The sale is expected to be EPS accretive and represents our exit from highly operational multi-let industrial estates.
“Looking forward, we will continue to focus on aligning the portfolio to NNN [triple net] lease assets that can deliver secure income and growth without incurring dilutive operational costs.”
To read the latest edition of the latest IPE Real Assets magazine click here.