Palmer Capital Partners has cancelled its proposed sale of a £175m petrol station portfolio, but has backed £80m of purchases in the belief that the UK market is now close to the bottom of its cycle.
The venture capital and fund management company, run by Ray Palmer, had a buyer lined up for the 85 Somerfield petrol stations last year but, after price chipping, PCP abandoned the sale “pending market improvement”.
It has refinanced the portfolio with Hypo Real Estate Bank.
PCP, which backs eight businesses, said it would now only sell property in exceptional circumstances and would instead be a net buyer. It hopes to spend around £200m this year.
Its recent acquisitions include: an office at Doxford International business park in Sunderland, which it bought with Wrenbridge Land for £15.5m – an 8.25% yield and a £15m mixed-use site in Enfield, bought with Frontier Estates.
Director Rupert Sheldon said: “We are starting to see institutional vendors’ price expectations coming into line with what the market is prepared to pay.
“Three-year swaps are down 1.30% compared with six months ago and, with further downward pressure on interest rates, we can see a re-emergence of a positive yield gap for property in 2008.”
