Berkeley Eastoak Investments, the Berkeley Group’s joint venture with Saudia Arabian investor SAAD, is planning to place £120m in the commercial property market following the sale of half its investment stock. Antony Barnett reports.
BEIL has sold to Mercury Property Fund a £70m portfolio consisting of seven retail warehouses or out-of-town units and three office investments located in the South East. A yield of 7% was acheived with 90% of the income secured on leases having unexpired terms of over 19 years. Mercury was advised by King Sturge & Co. In addition, the company has sold a single £20m distribution unit to a UK fund. The properties disposed of by BEIL were acquired over a three-year period from 1991 for a total of £62m and the sale shows a £11m profit before tax up to the April 30 year-end.
BEIL’s remaining portfolio is now worth around £80m. The company’s strategy had been to hold its property investment portfolio, but the board reports that it received unsolicited offers which it “was unable to ignore”.
Paul Read, managing director of Berkeley Commercial Development, said: “We received approaches which we initially rejected, but in the end it was hard to say no. The sale will help us to realise capital gains and give us an ability to reinvest and take our portfolio up to £200m. We will look at prefunding development where we might get a slight edge on the yield.”
Meanwhile, Black Horse Life has bought a portfolio of seven shops from NFC Common Investment Fund for nearly £11m, showing a net initial yield of 5.25% and an equivalent yield of 5.6%. The Superdrug unit on Market Place in Stratford upon Avon is one of the units acquired by BHL.
E A Shaw & Partners and Lloyds Investment Managers advised the purchaser.
Healey & Baker acted for NFC.
