UK private asset management group IO has bought six multi-let industrial estates in the UK on behalf of Tesco Pension Fund (TPF) for a total of £27.3 mln (€31 mln).
The estates comprise 428,000 sq ft (39,800 m2) of space and their purchase reflects an average net initial yield of around 6.25% and a reversionary yield in excess of 7.5%, with a 16% vacancy.
These are the first purchases following IO’s appointment by TPF on a £60 mln segregated mandates to buy and hold multi-tenanted industrial and urban logistics estates with a value of £2 mln to £10 mln.
The purchased properties are Pembroke Court in Runcorn comprising 150,000 sq ft, Bishops Court in Warrington (110,000 sq ft), Severn Link Distribution Centre in Chepstow (80,000 sq ft), Old Mill Lane Industrial Estate in Mansfield (36,000 sq ft), Centurion Court in Milton Keynes (24,000 sq ft) and Thames Trading Estate in Salford (31,000 sq ft).
Angus Scott-Brown, managing director of IO Asset Management, commented: 'These purchases represent just under half of the original mandate to acquire multi-let industrial estates for Tesco Pension Fund. Our focus is on finding high-quality properties with active management potential, and we are continuing to identify similar opportunities across the UK.'