Knowsley property firm sells entire portfolio for £150m
KNOWSLEY-based industrial property specialist Spencer Commercial Property has sold its entire portfolio of properties for £150m.
The family-owned company has sold all 88 of its properties, comprising 4.1m sq ft of industrial space, to AIM-listed property firm Hansteen Holdings and to a fund operated by the Kent-based firm.
Hansteen Holdings has bought 44 of the assets with a current rent roll of £6.0 million (after deduction of head rents) and a vacancy rate of 41.6% for £75.2 million, representing an initial yield of 8.0%, or 8.51% excluding development land.
It has used £33.9 million of its own cash resources to make the purchase, and arranged a new debt facility of £41.3 million provided by Lloyds Banking Group.
The fund (Hansteen UK Industrial Property Limited Partnership) has bought the remaining 44 assets, with a current rent roll of £6.4 million (after deduction of head rents) and a vacancy rate of 17.2%, for £74.8 million, representing an initial yield of 8.5%.
It has used existing and new debt facilities provided by Royal Bank of Scotland.
Following the deal, assuming prudent gearing of 50% LTV, Hansteen said it has firepower of approximately £300 million for further acquisitions. The Fund is now effectively fully invested with gross assets of £166 million and debts of £76 million.
The book value of Spencer Commercial Property’s assets has declined in recent years. Accounts show that in the year to March 31, 2009, land and buildings owned by the company were worth over £218m. In the year to March 31, 2010 (the last for which accounts are available), the value of its fixed assets had fallen to just over £180m. During the year, the firm declared a pre-tax loss of £3.5m on income of £15.7m.
Morgan Jones, joint chief executive of Hansteen, said: “The portfolio is highly compatible with Hansteen’s intensive management approach and the team’s experience across the UK market.
“It has strong fundamentals and a high vacancy rate providing a great opportunity to create significant added value through improving occupancy and imposing our own approach.”
