London-based private equity real estate firm Clearbell Capital has led a party of buyers in the acquisition a £153 million (€214 million; $239 million) UK mixed-use portfolio from Aberdeen Asset Management.
The firm made the investment together with Franklin Templeton Real Asset Advisors and an unnamed co-investment partner. The transaction was financed with £70 million of equity and debt at around 65 percent loan-to-value from Wells Fargo.
The Amber portfolio consists of 29 retail, industrial and office assets located across the UK, totalling 2 million square feet. Industrial assets make up 42 percent of the portfolio while retail and office assets make up 32 percent and 20 percent respectively. More than half of the assets are located in the South of England.
The portfolio has a low vacancy rate of 4.5 percent and an annual income of £13.2 million in rent and a weighted average unexpired lease term to first break of 4.5 years. The largest tenants include retailers B&Q, Travis Perkins, Sports Direct.com, LG Electronics and Vodafone.
To improve the portfolio Clearbell plans on lowering the vacancy rate and committing significant capital expenditure to asset improvements. The portfolio offers significant asset management potential in various assets including turning certain properties in Bournemouth, Basildon and Sheffield into residential or other mixed-use schemes, according to the firm.
“This portfolio not only has an existing strong cash income, but also offers the opportunity to apply our asset management skills in the letting of nearly 100,000 square foot and the redevelopment of key sites,” commented Rob West, partner at Clearbell. “Given the large equity requirement, we are delighted that we were able to allow two existing investors to co-invest alongside the fund.”