UK - European industrial real estate investment trust (REIT) Hansteen has purchased an industrial estate and is in due diligence on three others for its new UK fund backed by institutional investors.
Hansteen, which converted to a REIT last year, launched a UK Industrial Property Unit Trust (HPUT) in 2009, raising £60m (€67m) from five institutional investors and co-invested a further £30m.
Using up to 50% gearing, the fund was intended to buy UK industrial properties with a maximum lot size target of £15m, but Hansteen admitted it had been slow in making initial acquisitions for the fund, blaming a "dearth of value opportunities" in the market.
In its annual results announcement, Hansteen said the team responsible for HPUT was now beginning to see evidence of value emerging in the industrial sector and revealed it acquired an industrial estate in Birmingham for £1.4m.
Three further acquisitions are hoped to bring total invested capital to £10m and reflecting yields around the 8% mark.
Hansteen said it was pursuing various opportunities, including those derived from banks in possession of assets in loan default and from real estate funds where gearing was unsustainably high.
"We are also beginning to see value returning on a selective basis to the industrial property sector in the UK and, although the real economy will undoubtedly remain difficult the Board is optimistic for the medium term prospects," said James Hambro, chairman at Hansteen.
HPUT will be Hansteen's sole dedicated vehicle for new UK industrial properties below £15m until it is fully invested, but the lack of attractive industrial investment opportunities in the UK has also had an effect on the REIT's wider investment plans.
In July 2009, Hansteen raised close to £200m in new equity with a view to pursuing opportunistic property acquisitions resulting from the economic downturn.
Hansteen initially expected the bulk of this capital would be invested in UK based investment property opportunities, but the number of assets available at attractive prices in the UK has been very limited, it said.
The REIT recruited Mark Ovens and James Havery, who previously ran the Ashtenne Industrial Fund, in 2009 to spearhead the return to the UK market.
The team is only now beginning to see opportunities arise, mainly from bank balance sheets and real estate funds with refinancing problems, Hansteen said.