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Offices deal

Asset manager LSPIM acquires £236m portfolio

133 Finnieston Street, Glasgow, is included in the deal

London and Scottish Property Investment Management (LSPIM) has acquired a £236 million portfolio of predominantly multi-let regional offices from Squarestone Growth. 

The Glasgow-headquartered asset manager for regional office specialist Regional REIT said more than 93% of the portfolio’s value comes from 27 regional office properties that provide in excess of 1.6m sq ft of space to 192 tenants.

The remainder of the portfolio comprises two industrial units of 120,020 sq ft, a residential property with 12 tenants and a Tim Horton’s Drive-Thru restaurant.

The deal includes seven properties in Scotland, totalling over 270,000 sq ft.

The contracted annual rent roll for the portfolio is £21.9 million. This corresponds to a net initial yield of 7.8%, but LSPIM expects to ultimately realise a yield of 11%. This will be achieved through a series of asset management initiatives in the coming years to improve occupancy, rental income and capital value.

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The acquisition marks a significant step in LSPIM’s execution of its strategy to focus the Regional REIT portfolio on high-yielding office property that it considers either mis-priced in the market or offers significant asset management potential.

Of the REIT’s portfolio, which was valued at £732.4 million at 31 December 2020, over 83% was in office assets. This acquisition, combined with the recent disposals in August of c.£60 million of industrial property, significantly increases the portfolio’s regional office focus.

The small number of non-office properties in this acquisition will be included in LSPIM’s ongoing disposal programme for non-core assets.

Stephen Inglis, CEO of LSPIM, said: “This deal is a major milestone for us in terms of its scale, and sourcing it is testament to the strength of our network.

“Our asset management platform is based on a multi-disciplinary team of 62 professionals working across a range of disciplines including asset and property management, financial management, research, legal, corporate and corporate finance.

“Through the combined skills of our in-house team, we expect to achieve significant returns in terms of income growth and ongoing asset management initiatives.”

Properties included in the portfolio:

PropertyTownSectorArea (sq ft)
133 Finnieston StreetGlasgowOffice60,213
Buchanan GateGlasgowOffice39,618
Lightyear, Glasgow AirportGlasgowOffice77,688
St James Business ParkPaisleyOffice30,605
Tim Hortons, St James Business ParkPaisleyRetail2,010
St James Business CentrePaisleyOffice22,026
Quantum Court (see note 2)EdinburghOffice38,328
Dundas HouseRosythOffice69,373
Manchester GreenManchesterOffice105,983
The Lighthouse, Salford QuaysManchesterOffice64,275
The Royals, Altrincham RoadManchesterOffice52,841
Capitol Park,LeedsOffice98,340
Central Park, New LaneLeedsOffice57,889
Victoria ParkLeedsIndustrial64,249
5 Temple SquareLiverpoolOffice40,738
Centre Park, Firecrest CourtWarringtonOffice36,457
Cromwell PlaceBasingstokeOffice31,633
Mountbatten HouseBasingstokeOffice160,475
Eagle Court, Coventry RoadBirminghamOffice132,979
Aspect House, Bennerley RoadNottinghamOffice64,016
Hudson HouseDerbyOffice31,858
OriginBracknellOffice33,105
OriginBracknellResidential10,672
550 Bristol Business ParkBristolOffice16,794
Trinity Court, 21-27 Newport RoadCardiffOffice37,790
Mere GrangeHelensOffice45,113
Newport Retail Park, Seven Stiles AvenueNewportIndustrial55,771
Southgate ParkPeterboroughOffice81,582
Newburn & Gateway HouseNewcastleOffice54,584
Admiral HouseSunderlandOffice37,728
Endeavor HouseSunderlandOffice112,575

Note 2: The £236 million includes Quantum Court, valued at £5.4 million, which is awaiting consent to transfer and is expected to complete at the end of September.



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