Newcore Capital, the UK-focused real estate investment manager specialising in social infrastructure, has acquired two education assets in Cambridge and Oxford as well as a food distribution asset in Colchester. The assets were purchased for a combined sum of approximately £11m (€12.7m), reflecting a net initial yield of 6.1%.
The assets in Cambridge and Oxford were acquired on behalf of core-plus separate accounts. Both sites are let to Aspect International Language Academy (trading as Kaplan International).
The food distribution centre in Gosbecks Road, Colchester has been acquired on behalf of Newcore’s latest value-add fund, the Newcore Strategic Situations V (NSS V), which closed in May this year having raised £190m in equity. Support for the fund included the Merseyside and Clwyd local government pension schemes.
NSS V remains active in the market for educational properties as well as other social infrastructure assets, including waste, open storage, healthcare and veterinary, Newcore said.
Harry Savory, CIO, Newcore Capital, said: “Owing to their low passing rents and the underlying societal need for the services that they enable, these three properties are expected to perform strongly on a long-term risk-adjusted basis.
“The properties in Cambridge and Oxford would sustain a wide range of educational uses, including childcare and special educational needs, if the current tenant ever chose to vacate. Colchester is an important hub for food distribution – an increasingly important societal trend and therefore a sector of interest to Newcore.”
Newcore’s CEO Hugo Llewelyn added: “Our purchases are always very conscious of the wider societal shifts taking place in social infrastructure provision across the UK, as increasingly stretched government resources creates significant opportunity for private investment in the sector. They are similarly conscious of minimising risk to the highest extent for us, our tenants and investors.
“Market conditions, though bleak overall, have created a fantastic window of opportunity to satisfy this requirement through the availability of social infrastructure real estate entailing resilient demand fundamentals at highly attractive discounts.”
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