Miller Developments is about to buy the entire UK portfolio of one of Israel’s biggest property companies for £215m.
In its largest investment deal to date, Miller has struck a deal to buy the 836,000 sq ft portfolio of Alony Hetz, an investment company listed on the Tel Aviv Stock Exchange.
A source close to the deal said Miller had not been among the early bidders for the portfolio, but stepped in after talks with Allied London collapsed. The £215m purchase reflects a yield of around 7%.
The source added that chief executive Phil Miller was likely to trade around £100m-worth of the portfolio in the short term, but had not yet identified which properties the company would sell.
The purchase takes Miller’s investment spend to £335m this year, more than double its original £150m target. Its spending had been slow as it struggled to find suitable product, but gained ground last month when it bought a £43m mixed-use portfolio of 15 properties from Invesco, a 7.7% yield. That deal brought Miller’s spend on investment properties to £120m.
The Alony Hetz portfolio was built up largely through acquisitions from British Land and comprises eight properties — retail and offices in major English and Scottish cities.
They include the 225,000 sq ft (21,000m2) former Gateway head office complex, Somerfield House in Bristol; an 80,000 sq ft (7,400m2) Customs & Excise office next to Spinningfields in Manchester; and the 50,000 sq ft (4,600m2) Dawson House in Jewry Street, EC3.
Alony Hetz instructed portfolio specialist Roualeyn Cumming-Bruce, head of national investment at Jones Lang LaSalle, to handle the sale of the package in June (29 May, p33).
Miller was unrepresented.
