Cordatus Property Trust has bought the Lion Portfolio for £25.7m from IO Group.
The 10-asset portfolio of UK multilet industrial estates total 390,000 sq ft. The assets currently generate a passing rent in excess of £1.8m per annum and the purchase price represents an initial yield of 6.8%.
The deal is the first for the trust, which was formed this month between Cordatus and CBRE Global Investment Partners. With with initial funding of £150m the vehicle is targeting investment opportunities “in strong micro locations, primarily in UK regional markets, with typical lot sizes of between £3m to £15m, to generate above market income distribution”.
Gavin Munn, director at Cordatus, said: “This is an ideal first purchase for Cordatus Property Trust providing a geographically diverse, granular income stream together with the potential to apply our asset management expertise to add value.”
Angus Scott-Brown, managing director of IO, said: “The sale of this portfolio marks the conclusion of our business plan for the IO 1 portfolio, held in joint venture with Grosvenor Group, which has delivered annual returns to investors of more than 20%.
“We are now focusing on our new £120m joint venture, IO2. We have invested £35m to date and continue to see some excellent opportunities to replicate the investor returns we achieved in our first venture.”
BNP Paribas Real Estate acted for Cordatus Property Trust and Lewis Ellis acted for IO.
