Savills Investment Management has repositioned its UK Income & Growth Fund to focus purely on industrial by selling out of retail in a £47m deal.
Jamie Pearson, UK Income & Growth Fund manager at Savills Investment Management, said the reshuffle was part of a strategy “to defensively position the fund for the next phase of the market cycle and ensure that it continues to deliver a 5% income return to investors in the long term”.
Savills IM sold the 117,800 sq ft Gallagher Retail Park in Bristol to CCLA for £32.3m – a 5.9% yield. It has an unexpired lease term of seven years and an annual rent roll of about £2m.
The capital raised from the sale has been reinvested into a Fujitsu data centre in Stevenage, Hertfordshire, and an industrial warehouse in Guildford, Surrey.
The Stevenage asset was acquired from a private investor for £8m – a 4.7% yield. The property is let to Fujitsu Data Services until 2035 with annual rent increases fixed at 2.5%.
In Guildford, Savills IM bought Unit 6 at Henley Business Park from Meridian Metal Holdings for £7.3m – a 5.2% yield. The park has fixed annual increases receivable every five years and is let to Meridian Metal Trading on a new 15-year lease.
CCLA was represented by Clay Street; the private vendor of the Fujitsu data centre was advised by JLL; Meridian Metal Holdings was represented by Deloitte Real Estate; Savills acted for Savills IM.
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