IO Asset Management has bought six multi-let industrial estates on behalf of Tesco Pension Fund for £27.3m.
The estates total 428,000 sq ft. The average net initial yield reflects around 6.25% and a reversionary yield in excess of 7.5%. They have an overall vacancy of 16%.
IO has been given a £60m segregated mandate by Tesco to buy and hold multi-tenanted industrial and urban logistics estates with a value of £2m to £10m.
The properties are:
■ Pembroke Court in Runcorn totalling 150,000 sq ft. Net initial yield of 5.3%.
■ Bishops Court in Warrington totaling 110,000 sq ft. NIY 6.1%.
■ Severn Link Distribution Centre in Chepstow totalling 80,000 sq ft. NIY 6.7%.
■ Old Mill Lane Industrial Estate in Mansfield totalling 36,000 sq ft. NIY 6.7%.
■ Centurion Court in Milton Keynes totalling 24,000 sq ft. NIY 6.3%.
■ Thames Trading Estate in Salford totalling 31,000 sq ft. NIY 6.7%.
All purchases were made from individual private investors.
Angus Scott-Brown, managing director of IO, said: “These purchases represent just under half of the original mandate to acquire multi-let industrial estates for Tesco Pension Fund.
“Our focus is on finding high quality properties with active management potential, and we are continuing to identify similar opportunities across the UK”.
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