Skandia fund acquires UK retail warehouse for EUR 24m

Skandia Property Fund, which is managed by ING REIM, has purchased a retail warehouse in the UK for £21.7 mln (almost EUR 24 mln). The 8,300-m² modern retail unit in Halesowen, West Midlands is let to DIY and home improvement retailer B&Q.

The property, which has a net yield of 6.8%, comes with a long lease and a strong and stable tenant. This increases the fund's average lease length from 10.4 to 10.9 years and occupancy rate from 93.3% to 93.8%, fund manager Nigel Pickup of ING REIM said. The purchase has also cut the cash weighting of the £316 mln fund from 21.9% to 15%, something Pickup expects to reduce further as he looks to make further acquisitions in 2010.

'This acquisition continues our investment programme at an attractive time following the falls in commercial property prices in 2007/2008 and marks the third purchase so far this year totalling £42.75 mln of new assets acquired for the fund,' Pickup said.

He added: 'We have seen a marked change in investor sentiment resulting in net inflows of cash into the fund and therefore we are able to take advantage of the opportunities in the market and purchase prime assets at prices offering an attractive income return and where we are confident of achieving capital growth.'