Ground rents sold at Nikal’s Masshouse scheme

BROOKS Macdonald Funds has bought the ground rents of The Hive – the residential element of Manchester-based developer Nikal’s £600m Masshouse scheme in Birmingham.

Brooks Macdonald said the purchase, for an undisclosed sum, includes ground rents for 167 residential apartments and commercial space.

The purchase was made by its Channel Islands-listed Ground Rents Fund from Masshouse Developments – a joint venture between Nikal and an equity arm of Royal Bank of Scotland.

It said the deal follows on from the purchase of ground rents at the first phase of the Masshouse project in October 2009.

The ground rents fund was one which was acquired by Brooks Macdonald following its purchase of Hale Barns-based Braemar Group in a £4m deal last year. Its portfolio includes ground rents from a number of high-profile residential developments, including Beetham Tower in Manchester.

At 30 September 2011, the ground rents in the portfolio provided a yield of 5.51% with additional income in excess of 1% from the active asset management of properties provided by Braemar Estates. It currently manages over £750m of leasehold properties.

James Agar, development director for Brooks Macdonald Funds and Braemar Estates, said: “This asset provides the fund with a further high quality development which fits its acquisition profile.

“Hive has a ten year, RPI-linked cycle offering investors in the fund a hedge against inflation, which is a key investment criteria given the current market conditions.

“The asset will be managed by Braemar Estates, who has successfully and professionally managed the first phase of the Masshouse development, allowing Braemar Estates to actively manage assets within the Ground Rents Fund and the income which is generated.”