Max Property Group has signed its first deal since raising £211 million ($351 million; €252 million) in an IPO in May, the London-based firm confirmed today.
The £232 million deal sees Max Property buy a 7.6 million-square-foot portfolio of light industrial properties across the UK. The units were bought from Ernst & Young, which was acting as receiver for the collapsed investment firm, Industrious Group.
Max said in a statement almost half the portfolio was located in London and the South East of England, with 1.5 million-square-feet of space currently vacant or set to become vacant in the near future. The firm went on to add that the gross rental of £22.7 million a year, including vacant units, produced a net yield of 10.3 percent once all costs and empty units were taken into account.
Chairman Aubrey Adams said at roughly £32.50 per square foot, the portfolio was acquired for almost half the asset’s replacement cost. “As a result of the receivership the portfolio has suffered considerably from under-investment for some time now. We must focus firstly on stabilizing rents and then increasing them in the medium term,” he said.
The deal is being financed with cash and a £128.3 million non-recourse, five-year debt facility arranged by Eurohypo. The deal is expected to close in October.
Max Property was the brainchild of real estate veteran Nick Leslau and is backed by New York alternative assets firm, Och-Ziff Capital Management.