Hansteen Holdings PLC (LSE: HSTN), the UK and Continental European property investment company, announces the sale of the Hansteen UK Industrial Property Unit Trust (“HPUT” or “the Fund”), a UK multi-let industrial property portfolio, in two transactions for a total of £146.1 million (after the deduction of rental top-ups).
The 41 assets in HPUT have been acquired by a fund advised by Brockton Capital LLP (“Brockton Capital”) in a partnership with Dunedin Property for £110.5m. A separate 50/50 joint venture between Brockton Capital and Hansteen has acquired Saltley Business Park in Birmingham for a net price of £35.6 million. Hansteen will continue to manage Saltley Business Park.
HPUT was launched in July 2009 with £90 million of equity from Hansteen and five institutional investors. On exit it comprised 42 assets across England, Wales and Scotland with a combined floor area of 3.04 million sq ft, a void rate of 9.65% (293,644 sq ft), a passing rent of £10.0 million per annum, equating to average rents across the portfolio of £3.68 psf, and a contracted rent of £11.5 million. Additionally the Fund had 25.7 acres of development land.
The 41 assets sold within the Fund have a passing rent of £7.6 million per annum, a contracted rent of £8.5 million per annum and a void rate of 13.5% (272,724 sq ft).
Saltley Business Park has a passing rent of £2.4 million per annum, a contracted rent of £3.0 million per annum and a void of 2.05% (20,920 sq ft).
Mark Ovens, Director UK of Hansteen commented: “We launched HPUT to take advantage of the economic downturn which had resulted in high levels of distress throughout the sector. Acquisitions were made up to December 2011, predominantly from situations where banks were involved. Intensive asset management and some smaller sales followed before the final exit. It is tremendously satisfying to have launched the Fund, met the investment return objectives and returned the capital to unitholders within the timescale envisaged at the outset.”
James Havery, Director UK of Hansteen, commented: “HPUT played an important role in Hansteen’s return to the UK market, allowing us to stretch our equity base and enjoy an equity return alongside co-investors, together with management fees. The success of HPUT led to a second fund, HPUT II, being established in May 2013; and our re-capitalisation of the Ashtenne Industrial Fund (AIF) in August 2013 is the third successful example of co-investing alongside institutional investors. We are currently rigorously asset managing HPUT II and AIF through our regional network of teams.”
Morgan Jones, Joint Chief Executive of Hansteen, commented: “We are delighted to have established a new partnership with Brockton Capital at Saltley Business Park and look forward to working with them on what is a significant and strategically important landholding in Birmingham. The site has a history of being traded at very high prices and whilst it falls into the zone of influence of HS2, we believe the property and its business plan has a strong future, not least because of its strong income profile based off conservative levels.”
Tony Edgley of Brockton Capital, added: “We are delighted to have bought the HPUT assets in a continuation of our joint venture with Dunedin, through these corporate acquisitions. This is a first class, geographically diversified portfolio with excellent credit risk and a wide range of properties for all types of light industrial, storage and business users across a range of sectors. It also gives us the opportunity of working in partnership with Hansteen at Saltley Business Park. This is the first in a number of light industrial estate acquisitions that we are likely to undertake.”