IO snaps up industrial portfolio

Industrial estate manager IO has bought a portfolio of assets from MStar, a joint venture between Starwood Capital and M7, for £76m.

The portfolio comprises 24 freehold and long leasehold, multi-let industrial estates, located mostly in established industrial locations across England and Scotland.

It totals 1.5m sq ft in 238 units, has a combined vacancy rate of 11.3%, and produces an annual rental income of £5.8m.

The purchase price reflects a net initial yield of just less than 7%.

The acquisition means the vehicle, IO Investment 2 LLP (IO2), is 100% invested within three months of closing.

Angus Scott-Brown, managing director of IO, said:

“This acquisition proves our continuing ability to source the right type of multi-let industrial stock for our investment partners.

This portfolio provides us with geographic diversity across core markets where there are strong rental growth prospects, given the improving economic climate, growing tenant demand and an increasingly acute shortage of stock.”

Deloitte Real Estate acted for IO; GVA acted for MStar.