The largest single transaction was the sale of 10 Dean Farrar Street - a multi-let office building in Victoria. The property lies 50 yards from New Scotland Yard and was sold to CERN (the European Organization for Nuclear Research) for a price of £26.1 million, reflecting a net initial yield of 4.2% and a capital value of £900 per sq ft. The average lease length was 3.5 years to break options.
Acquisitions during December included the Invictus Portfolio of car showrooms, comprising four bespoke facilities in prime locations (Camberley Audi, Teesside Audi, London NW9 and Birmingham) all let to Volkswagen for an average of 13 years. The portfolio was acquired from Standard Life and the price of £15.8 million, reflected a yield to the fund of 6.4%. A portfolio of four petrol filling stations let directly to BP on 20 year leases in new or modern facilities all with Marks & Spencer franchises was also acquired. These assets were all located in excellent locations (including Stow-on-the-Wold and Harrogate) and all benefit from 2,5% per annum compound uplifts - the purchase price of £14 million reflected a yield of 5.3%.
The Fund also acquired a recently opened block of serviced apartments for £9.5 million, located in central Manchester near to Piccadilly train station for a yield of 6.4%. The lease has 15 years remaining and annual rental uplifts. The largest acquisition was the Beam Portfolio – the latter comprising a balanced portfolio of 10 assets which was acquired from Aberdeen for £38.4 million reflecting a yield of 7.3%. All of the assets were institutional grade including three retail warehouses in Bristol, Chesham and Taunton, two Little Waitroses and an office building in Brighton close to the railway station.
Harry de Ferry Foster, Fund Director, commented:
“2014 was another busy year for the Fund with record inflows and a total transaction volume during the year of in excess of £200 million. Our acquisitions during the year generated a net yield of 6.7% which is accretive to our income aspirations. We have focused on alternative sectors where we continue to see opportunity for out performance, in addition to the industrial and fringe central London markets. Over half our acquisitions were sourced in exclusivity and it is testament to our stock picking that we were able to outperform the market whilst maintaining significant growth for the Fund. We have continued to focus on quality assets – a good example of this being the purchase of LK Bennett’s new HQ office in Shoreditch, which combines the fundamentals of a 100% prime development offering durable income and an improving location with prospects for future growth. The market conditions have also provided an opportunity to exit from some holdings where we think pricing is potentially frothy or where we have executed asset management initiatives at non core holdings.”
Citigate Dewe Rogerson
Patrick Evans / Stephen Sheppard / James Madsen / Alice Stewart
Tel: +44 (0)20 7282 2966