BMO invests £60m across nine assets

By James Buckley - Friday, October 20, 2017 11:49

BMO Real Estate Partners, the pan-European property investment and asset management specialist that is part of Canada’s BMO Financial Group’s £189bn Global Asset Management business, has invested £60m across nine properties on behalf of the F&C UK Property Fund, reflecting an initial yield of 4.8%.

In the last 12 months, a total of £100m has been raised and invested into the open-ended fund’s portfolio, increasing its total value by a third to £416m.

In line with the diversified portfolio strategy, the £60m investment is split across the offices (35.9%), industrial (34.5%), retail warehousing (22.5%) and retail (7.1%) sub-sectors and it enhances the overall weighting towards industrial and offices in particular. While increasing the sector and geographic diversification of the portfolio, the acquisitions also improve the Fund’s income return by reducing cash levels to 18%. With an additional c. £20 million of assets currently under offer, cash levels are expected to further reduce to close to the target of 12%, should these transactions complete.

Guy Glover, Fund Director, of F&C UK Property Fund at BMO Real Estate Partners said: “The investments we have undertaken in the past year have transformed the Fund’s portfolio whilst efficiently deploying the inflows we’ve received from our committed investors over the same period.

“These latest acquisitions will deliver additional high quality income, with significant opportunity to add further value through asset management and lease renegotiations. With a strong pipeline of potential transactions currently in negotiations, we are well placed to deliver a stable income return on behalf of our loyal and long term investor base.”

A breakdown of the recent acquisitions is as follows:

Offices:

-25,137 sq ft fully refurbished asset on Fountain Street, in Manchester’s prime office district, fully let to Traveljigsaw Limited, including a 2,725 sq ft retail unit on the ground floor which when let provides scope to further enhance income.

-Onslow Hall, Richmond Upon Thames, a 8,109 sq ft Grade II listed multi-let office close to the high street and Richmond mainline station, fully let to Barclays Bank and three smaller occupiers at an average rent of £37.50 psf, with strong reversionary potential.

-30,006 sq ft of grade A office space over ground and two upper floors at NG2 Business Park, Nottingham, with access to parking for 108 cars and fully let to VF Northern Europe Limited with a rent review due in December 2018.

Industrial:

-57,314 sq ft distribution warehouse and ancillary two storey office accommodation at Burnt Mills, Basildon fully let to Yodel Delivery Network Limited and strategically located close to the A127 and A13 dual carriageways providing direct access to Central London and Junctions 29 and 30 of the M25 Motorway. Basildon sits in a strong South East location with rents for logistics units being agreed in excess of £7.00 psf due to a lack of supply and strong levels of demand. 

-Apex 30, London Road Staines-upon-Thames, comprising two logistic units with an ancillary two storey office building totalling 42,370 sq ft, located 3.2 miles (5.1 km) from Heathrow Airport and within close proximity of Junction 13 of the M25 motorway, providing direct access to Junction 2 of the M3 Motorway, Junction 4B of the M4 Motorway and Junction 1A of the M40 Motorway.

-Units 500–900, Ashchurch Business Centre, Tewkesbury, comprising four self-contained warehouse units totalling 56,669 sq ft immediately adjacent to Junction 9 of the M5 motorway and close to Junction 1 of the M50. Three of the four units are let to Weatherford UK Ltd, Bowmill Engineering Ltd, and Allen-Vanguard Ltd with potential to improve the income by letting the vacant 4th unit.

Retail Warehousing:

-26,840 sq ft retail warehouse on Staden Lane Business Park in Buxton, the town's primary retail/business park, fronting onto one of the town’s main arterial routes and let to B&Q with nine years remaining on the lease.

-34,968 sq ft retail warehouse with an ancillary garden centre on Felixstowe Road, Ipswich let to HHGL Limited, trading as Homebase, with a further 4 years remaining but offering the potential to extend and reconfigure the space to provide up to three separate retail units.

-15,947 sq ft across a block of five retail units predominantly on the prime section of South Street, Dorchester that are fully let to Waterstones, Card Factory and Clinton Cards with the final two units are occupied by Weldmar Hospice Care and Sue Ryder, all on a variety of lease lengths.

jbuckley@costar.co.uk

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