UK - The Merchant Navy Officers Pension Fund (MNOPF) has sought to rebalance its UK real estate portfolio and sold three commercial real estate assets in the UK, for almost a third more than recent valuations.

Assets in Cheadle Hulme, Nottingham and central London were sold by Wilky Fund Management on behalf of the pension fund for a total of £60m (€67.6m).

The sale prices reflected a capital growth of up to 50% and an average of 32.8% during the nine-month period from March 2009 when the properties were valued by CB Richard Ellis.

Wilky Fund Management has revealed that the three disposals were part of a plan to reduce the pension fund's property holdings "in order to achieve a more balanced portfolio".

The three properties were identified as having the potential to generate substantial returns for MNOPF within the timeframe required.

One of the assets was a 41,400 square foot Waitrose store in Cheadle Hulme, which MNOPF has owned since 2000 and was sold in December to an unnamed private pension fund for £15.6m (€17.5m), reflecting a net initial yield of 4.6%. (See earlier IPE Real Estate story:  Merchant Navy sells Waitrose property)

"We have proved that expert asset management can generate substantial returns, even in this difficult market," claimed Mark Frost of Wilky Fund Management.

"All three properties were selected because their quality, growth potential and location matched current market requirements. These three disposals are indicative of a resurgence in the market. These deals have been struck at initial yields as low as 4.6% which is an indicator of how the property market is now being perceived."

He continued: "We are certainly not into boom times, but we are seeing light at the end of the tunnel, or even emerging from it."