US developer-investor Hines has acquired a portfolio of four multi-let industrial estates in the West Midlands on behalf of its Hines European Value Fund 2 (HEVF 2) from London Metric.
The four multi-let estates were bought for £40.5 mln (€47 mln), reflecting a net initial yield of 6.2%.
The estates encompass 435,000 ft2 (40,320 m2) across 47 units and generate £2.7 mln per annum of rental income, with a weighted average unexpired lease term to first break of 2.9 years. Three of the estates are located in Birmingham (Kingshill, Redwood Park and Shenstone) and the fourth in Rugby (Triton Park).
The properties were previously acquired as part of the Mucklow acquisition in June 2019 for an allocated price of £31 mln. The sales crystallise an ungeared IRR of 13% and are in line with March 2023 book value, the vendor said.
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.'
Andrew Jones, Chief Executive of LondonMetric, commented: '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 lease assets that can deliver secure income and growth without incurring dilutive operational costs.'
LondonMetric was advised by ACRE.
