Rockspring fund buys UK industrial portfolio for €76m

Rockspring’s Hanover Property Unit Trust has acquired a multi-let industrial portfolio in the UK from Hansteen Holdings for £62 mln (€76 mln).

The transaction reflects a net initial yield of 7.5%.

Mark Ovens, UK director at Hansteen, commented: ‘Bidding for this portfolio was extremely competitive, which reflects the strength of the multi-let industrial market. We believe this sector will continue to experience yield compression and rental growth because of sustained occupier and investor demand.’

The portfolio comprises 10 multi-let industrial estates and one office park located mainly in the South East of England, totalling 171 units and nearly 900,000 sq ft (84,000 m2). The occupancy rate is 91% and the assets are let to 120 tenants including HSBC bank, Virgin Media and Halfords Autocentres, generating an annual net rental income of £4.9 mln.

The portfolio was sold by Hansteen’s Ashtenne Industrial Fund and marks the fund’s first disposal since Hansteen was appointed as asset manager in August 2013. Hansteen also has a 36.7% interest in the fund.

Paul Crosbie, assistant director at Rockspring, commented: 'The South portfolio is a good example of the type of deal we have been targeting for the "income portfolio" of Hanover, offering an accretive yield to the fund’s distribution and the ability to generate higher returns through an increase in rents across the portfolio.'

Rockspring was advised by Fletcher King and Caisson on the transaction, while DTZ acted for Hansteen.