Tesco Pension Fund (TPF) has made its first investments via its multi-let industrial real estate mandate.
Specialist manager IO Asset Management said it bought six multi-let industrial estates on behalf of TPF for a total of £27.3m (€31.2m).
The estates comprise 428,000sqft of space and their purchase reflects an average net initial yield of around 6.25% and a reversionary yield in excess of 7.5%, with a 16% vacancy.
The acquired properties include Pembroke Court in Runcorn, Bishops Court in Warrington and Severn Link Distribution Centre in Chepstow.
The manager also bought the Old Mill Lane Industrial Estate in Mansfield, Centurion Court in Milton Keynes and Thames Trading Estate in Salford.
These are the first acquisitions following IO’s appointment in September last year by TPF on a £60m segregated mandates.
IO’s strategy for the TPF mandate is to buy and hold multi-tenanted industrial and urban logistics estates with a value of £2m to £10m.
Angus Scott-Brown, the managing director of IO Asset Management, said: “These purchases represent just under half of the original mandate to acquire multi-let industrial estates for Tesco Pension Fund.
“Our focus is on finding high-quality properties with active management potential, and we are continuing to identify similar opportunities across the UK”.
Tesco Pension Investment is the in-house investment team created by the trustee of the Tesco PLC Pension Scheme. It has the primary objective of achieving the long-term investment goals of Tesco’s occupational pension scheme, as set by the trustee and the trustee’s advisors.