IO Asset Management, the specialist manager of industrial real estate, has acquired five UK multi-let industrial estates on behalf of Tesco Pension Fund for £20 million.
The estates comprise 210,000 sq ft of space and their acquisition reflects a weighted net initial yield of 5.62% and a reversionary yield of 7.14%, with a vacancy rate of around 10%. The acquisitions increase the size of the portfolio managed by IO Asset Management for Tesco Pension Fund to 21 multi-let industrial estates, totalling more than 1 million sq ft.
The five estates are:
• Aylesham Industrial Estate in Bradford, bought for £3.4 million
• Ashchurch Business Centre in Tewkesbury, bought for £2.7 million
• 202 Burcott Road in Avonmouth, bought for £5.1 million
• Alpha Court in Corby, bought for £5 million
• Silver Birches Business Park in Bromsgrove, bought for £3.8 million
Angus Scott-Brown, managing partner of IO Asset Management, said:
“These transactions prove our ability to source the right type of multi-let industrial stock for Tesco Pension Fund. All five estates provide us with the opportunity to apply the IO system of asset management to add significant value, which, coupled with the limited supply and lack of new development in the multi-let industrial sector, suggests a strong period of rental and capital value growth. Our entire UK portfolio has proved extremely resilient throughout the pandemic, with rent collection averaging 98.5%, proving the attractiveness of the multi-let industrial sector”.