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.
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:
|Property||Town||Sector||Area (sq ft)|
|133 Finnieston Street||Glasgow||Office||60,213|
|Lightyear, Glasgow Airport||Glasgow||Office||77,688|
|St James Business Park||Paisley||Office||30,605|
|Tim Hortons, St James Business Park||Paisley||Retail||2,010|
|St James Business Centre||Paisley||Office||22,026|
|Quantum Court (see note 2)||Edinburgh||Office||38,328|
|The Lighthouse, Salford Quays||Manchester||Office||64,275|
|The Royals, Altrincham Road||Manchester||Office||52,841|
|Central Park, New Lane||Leeds||Office||57,889|
|5 Temple Square||Liverpool||Office||40,738|
|Centre Park, Firecrest Court||Warrington||Office||36,457|
|Eagle Court, Coventry Road||Birmingham||Office||132,979|
|Aspect House, Bennerley Road||Nottingham||Office||64,016|
|550 Bristol Business Park||Bristol||Office||16,794|
|Trinity Court, 21-27 Newport Road||Cardiff||Office||37,790|
|Newport Retail Park, Seven Stiles Avenue||Newport||Industrial||55,771|
|Newburn & Gateway House||Newcastle||Office||54,584|
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.