F&C UK Property Fund has made a hat trick of purchases totalling £15m, pushing the vehicle to meet its £50m fundraising target this week.
The open-ended UK property fund, advised by F&C REIT Asset Management, has bought two offices on Bristol business park comprising a total of 27,700 sq ft for £7m.
They are let to Motability Operations for a term of 15 years at low rents of £18 and £19.50 per sq ft, representing an initial yield of 7%.
It has also bought an industrial property in Coventry, close to junction 3 of the M6, for £3.5m. The 57,000 sq ft distribution unit is leased to Palm Recycling at £5.22 per sq ft, and the acquisition provides the fund with an initial yield of 8%.
Finally, it has paid £4.23m for a 4,800 sq ft shop at 20 High Street, Chelmsford. It is let to Santander UK for a further 11 years. The rent of £245,000 pa represents an initial yield of 5.5%.
The acquisitions helped the F&C UK Property Fund – the first open-ended UK property fund offered by F&C REIT – to reach its £50m fundraising target this week.
The fund was launched in June 2010 as an opportunity to buy into a “clean” portfolio of direct UK commercial properties.
Guy Glover, fund manager of the property fund, said: “These deals compliment the fund by enhancing the length of income to in excess of 10 years while improving the fund yield. But most importantly, they are good-quality buildings in locations attractive to tenants, and are let at sensible rents, providing scope to enhance the income in the future.”
Knight Frank represented F&C REIT Asset Management on the Coventry and Bristol purchases; Green & Partners was instructed on the Chelmsford deal.
bridget.oconnell@estatesgazette.com
