US private equity group Blackstone has acquired a portfolio of 40 light industrial assets in the UK valued at £320 mln (€362 mln) from investment manager InfraRed Capital Partners.
Announcing the deal on Friday, InfraRed said the portfolio, dubbed ‘Powerhouse’, comprises 4.5 million ft² (418,000 m2) of light industrial space across 40 properties located mostly in the North West and the Midlands region. It was sold on behalf of InfraRed’s Active Real Estate Fund III.
Financial details were not disclosed.
Blackstone purchased the portfolio together with pan-European asset manager M7 Real Estate, which announced separately that it had acquired eight industrial assets across the UK from a number of vendors for a combined purchase price of £26.1 mln (€30 mln).
Commenting on the deal, InfraRed director of real estate James Cooper said the company had added ‘significant value’ to the portfolio through asset management initiatives over a four-year period.
InfraRed created the Powerhouse portfolio through multiple acquisitions, the first of which took place in 2014. ‘During our hold period we increased the portfolio income by approximately 20% through completing a good proportion of our asset management initiatives ahead of time,’ he said.
‘The UK industrial market remains highly sought after by investors seeking defensive income underpinned by a shortage of available space plus the ongoing expansion of e-commerce and last mile delivery. This sector remains a core part of our pan-European investment strategy,’ he added.
InfraRed was advised on the transaction by Dowley Turner Real Estate, Osborne Clarke and Taylor Wessing.
M7 Real Estate said the acquisition of eight assets for €30 mln brings its total portfolio to 100 properties, following the launch in December 2017 of M7REIH with the purchase of a seed portfolio of 92 assets for £117 mln.
The eight new assets comprise 912,372 sq ft of space and consist of six multi-let industrial assets, a single-let distribution unit and a multi-let office park, located throughout the UK.
They are 98% let to 25 tenants – including Amazon, Bunzl, Howdens and Wolseley - and produce around £2.3 mln of passing rent per annum, representing an in place net initial yield of 8.3% and a reversionary yield of 13.5%.
