British and German industrial estates sold for £70m

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PROPERTY investor Hansteen yesterday sealed a pair of industrial estate deals worth a total of nearly £70 million after securing a fresh financing package from Royal Bank of Scotland.

The London-listed real estate investment trust (Reit) bought 32 properties spread throughout the UK from the Industrial Trust for £60m, including Lochlands Industrial Estate in Larbert and West Park in Cumbernauld.

Hansteen also completed the purchase of Zeppelin Park, a 160-hectare industrial estate in Berlin, for €11.3m (£9.3m).

RBS backed the deal with the Industrial Trust with a fresh banking facility, while Hansteen dipped into its own cash reserves to complete the purchase.

Morgan Jones, who founded Hansteen in 2005 with Ian Watson, said: “The acquisition has all the hallmarks of a classic Hansteen purchase having been sourced off-market and at a price that reflects a low capital value versus rebuild cost, a high and resilient running yield together with scope for real onward performance.”

The deal will give a net initial yield of 10.1 per cent based on the portfolio’s current rent roll of £6.1m, a vacancy rate of 16 per cent and an estimated rental value of £6.7m a year.

Commenting on the German deal, Watson added: “This is our first purchase, from a special servicer, of a property that was part of a commercial mortgage-backed security (CMBS) issue.

“It was complex and time consuming, and will require an investment of both skill and capital to fully realise the opportunities that it presents, however, we are confident that with that investment it will prove to be a great acquisition.”

The company said that it expected to spend about €3m refurbishing the 19 buildings, which are currently occupied by 19 tenants, to achieve a target rent of €2m a year. The current rent is about €1.7m a year, with a vacancy rate of about 17 per cent.

Hansteen already has 15 properties in Scotland, as part of its portfolio of more than 280 sites across Belgium, France, Germany, the Netherlands and the UK, worth a total of £1.2 billion.

Assets north of the Border include Colvilles Park in East Kilbride, Highland Rail House in Inverness and a warehouse on the Newbridge Industrial Estate on the outskirts of Edinburgh.

Hansteen joined the Alternative Investment Market (Aim) in November 2005 raising £125m.

In 2009, the firm raised a further £200.8m through a share placing and moved to the main market, before converting to become a Reit. The firm raised a further £150m in April 2011 through another share placing.

Before Hansteen, Jones and Watson launched property investor Ashtenne in 1989 and ran it until it was taken over by Warner Estate and Anglo Irish Bank in 2005. Ashtenne’s sites include Dewar House in Dunfermline, Hillington Park in Glasgow and Wellhead Industrial Park in Aberdeen.