Brixton has announced that it has exchanged contracts on a £460m portfolio sale to Dunedin Property.
The industrial specialist is disposing of the portfolio of smaller properties that it bought from Industrious to focus on its core portfolio in the south east.
The 84 properties, bought at a 5.6% yield, total 5.7m sq ft in 1,100 units with a rent of just over £27m pa.
The portfolio is made up of the majority of Industrious’ northern and Midlands portfolios, plus a significant element of the southern portfolio.
It also includes Castle Estate, High Wycombe, Southwood Business Park, Farnborough, and Tower Bridge Business Park, London, from Brixton’s main portfolio.
Excluding the Martlesham Heath Business Park in Ipswich – which is worth around £50m – the average lot size of the other 79 properties averages less than £4m.
Brixton will also benefit from a net 50% overage on any property sold by Dunedin within 12 months of completion, with the exception of a group of properties totalling £40m from a defined pool of £60m, which are excluded from this provision.
Brixton plans to dispose of a final element of around £60m of Industrious property over the next few months, including the Vaughan Trading Estate in Tipton, Birmingham, which is worth in excess of £40m.
As a result of this disposal, 16 staff from Brixton’s Manchester and Birmingham offices will transfer to the new owners.
The Industrious and Flexilet brands will also pass to Dunedin.
Brixton chief executive Tim Wheeler said: “We intend to positively reinvest the recycled capital, but we have never subscribed to the view that in a REIT environment you need assets for size sake.
“It is all about growth potential, enhancing income and focus – that’s the clear message from global investors, particularly the Americans.”
Franc Warwick advised Dunedin. CB Richard Ellis, King Sturge and Holley Blake advised Brixton.
References: EGi News 08/05/06
