Middle East investor snaps up major Borders business estate

What is thought to be the largest industrial estate in the Scottish Borders has been snapped up by a Middle Eastern investor.

European investment firm and asset manager M7 Real Estate said it had acquired Tweedbank Industrial Estate on behalf of a new separate account mandate for an unnamed Middle Eastern sovereign wealth investor.

The estate was acquired from funds managed by Catalyst Capital for just under £4.6 million, reflecting an initial yield of 8.62 per cent.

Tweedbank Industrial Estate comprises some 115,000 square feet of industrial space and is 93 per cent let to a range of occupiers. It is located close to Galashiels town centre and adjacent to the A6091, as well as being near to the new Tweedbank railway station, part of the Borders Railway.

M7 noted that the surrounding area is subject to wider development proposals including a new Premier Inn hotel and business space, which are expected to “enhance the estate’s position as the commercial centre of the local economy”.

The firm said the purchase was in line with the account mandate’s objective of “generating an attractive income return with opportunities to add value”.

Euan Burns, divisional director at M7, said: “This acquisition of a dominant asset in this location provides sustainable income but also offers future potential to add value through asset management. It also underpins M7’s commitment to the Scottish market after a very active 2018.

“We have identified a pipeline of transactions aligned to the strategy of this mandate, which we continue to progress.”

Guy Wilson, a partner of Catalyst Capital, said: “We are pleased to have restored Tweedbank Industrial Estate to near full occupancy following physical improvements to the buildings and the estate and the completion of our leasing programme.

“This is one of a number of sales we have recently realised for Catalyst European Property Fund 2 in line with the business plan.”

M7 Real Estate was advised by property consultancy JLL while Catalyst Capital was advised by Savills.

Established in 2009, M7 is a pan-European investor and asset manager specialising in multi-let properties. The firm’s team consists of more than 250 staff operating across a platform spanning 13 countries comprising the UK, Croatia, Czech Republic, Denmark, Finland, France, Germany, Hungary, Luxembourg, the Netherlands, Poland, Portugal and Slovakia.

Catalyst Capital, which was founded in 1996, is headquartered in London with offices in Frankfurt, Paris and Warsaw. It currently has some €1.6 billion (£1.4bn) of assets under management.