Rockspring buys two UK office, retail assets

The London-based investment firm has acquired a six-storey office property in Milton Keynes for £15.8m from CBRE Investors, at the same time as buying a Welsh shopping centre for £24m.

Rockspring Property Investment Managers has spent £40 million (€44.2 million; $60.3 million) buying a UK office property and shopping centre for two of its funds.

The London-based firm acquired the six-storey mixed-use office and retail property, Exchange House, in Milton Keynes, for £15.8 million. The deal was a joint venture with First Alliance Properties – the firm founded by former Richard Ellis fund management executives Mark Barnwell and Mike Tomkinson – and represented an initial net yield of 12 percent. The property, which is roughly 50 miles outside London, was bought from CBRE Investors.

Rockspring said the Milton Keynes deal was the second transaction with First Alliance. The property comprises 121,500-square-feet of office space and 27,000-square-feet of retail space and was bought through the firm’s closed-ended British-focused fund, Rockspring UK Value Fund. The vehicle held a first close on £152 million of commitments from five UK and European investors last year and is targeting £400 million of equity.

Rockspring added in the statement that it had also bought a Welsh shopping centre for one of its oldest funds, the open-ended Rockspring Hanover Property Unit Trust, first set up in 1967.

The St. Tydfil Square Shopping Centre, located in Merthyr Tydfil, Wales, was bought for £24 million from Cordea Savills on behalf of Diageo Pension Trust. Rockspring said the deal represented a net initial yield of 9.3 percent. Diageo bought the centre for roughly $33.1 million in May 2002, according to real estate data provider Real Capital Analytics.

Rockspring said both deals were good “asset management opportunities” for the firm that benefitted from “stable income”, with some potential for value-added works.

Rockspring has been an active buyer of UK property, reportedly acquiring a portfolio of 13 industrial property assets from Royal Bank of Scotland for £27 million. The firm has also purchased London offices on behalf of the National Pension Service of Korea (NPS), after it was charged by sovereign wealth fund to invest in central London offices as part of a wider strategy to deploy $3 billion directly into prime commercial real estate in key global cities.