Business park snapped up in £26.5m deal
Lawnswood Business Park in Leeds has been acquired for £26.5m.
The park comprises an eight-building portfolio of commercial office properties and it has been bought by Hillview Real Estate (HRE), the Real Estate division of The Hillview Group (THG).
Commercial property consultancy Lambert Smith Hampton (LSH) advised The Hillview Group on the £26.5m deal, which represents a net initial yield of 8.3%.
Lawnswood Business Park is located on the Leeds Outer Ring Road A6120, five miles from the city centre and 10 minutes by road from Leeds Bradford Airport. Office sizes range from individual suites of 1,900 sq ft to a self-contained building of 37,190 sq ft.
The acquisition comes as HRE have identified a post-Brexit pricing dislocation in UK regional markets across office and industrial properties. The market shifts have been driven by a general perception of uncertainty in the UK economy, suppressing value in high-quality regional property.
The portfolio of eight buildings, currently let to 17 tenants including: government agencies, technology and financial services companies and other SMEs, continues HRE’s focus on investing in high-quality regional property generating value maximised income through pro-active asset management; engaging directly with occupiers to ensure optimal use of office space as market trends evolve. The acquisition was funded by ICGLongbow, under a senior debt facility.
Nadav Livni, Managing Director of The Hillview Group, said: “While Brexit may be creating significant political uncertainty, the hesitancy from European and foreign investors offers opportunities for UK investors with a long-term perspective to established high-quality and diverse regional portfolios. Following Brexit there is an opportunity for the government to massively boost the UK economy by investing in regional areas and this will
benefit the regional office and industrial property sectors. Having such a strong talent pool, infrastructure, access to capital and leading-edge innovation, I am hugely optimistic about the long-term prospects of the UK as a global hub of high-value manufacturing industries and services.”
Luke Symonds, Director – Capital Markets at LSH, said: “Lawnswood Business Park presents a rare opportunity to acquire a prominent, unbroken business park with a strong occupier mix and undoubted growth potential. The Leeds out of town office market has demonstrated robust take up year on year and this is now leading to supply shortages for good quality stock. LSH is delighted to continue our relationship with Hillview, valued clients.”
David Mortimer, Head of Senior Debt at ICG-Longbow added: “We are delighted to have concluded our fifth senior debt deal with Hillview Real Estate as they continue to grow their portfolio. Their focus on high quality regional properties in the UK mid-market space matches our own, and we look forward to building on our already strong relationship with the Hillview Group as it continues to expand.”
In the past two years THG has expanded its investment activities with acquisitions totalling over 500,000 sq ft, despite the unclear outcome of the UK-EU Brexit negotiations. The Hillview Partners Property Funds have provided consistent returns through a carefully selected portfolio of well-located risk-mitigated, high-quality office and industrial properties across the UK, and there are plans for the launch of a third fund in 2019.
Bradley Pearlman, Partner at THG responsible for Investor Relations, added: “Investors are highly selective to identify those investment managers with a strong alignment of interest, a successful track-record of value creation across the real estate cycle, and the skill-set as an active asset manager to capture the evolving requirements of occupiers desiring flexibility. THG has established its reputation with investors over the last
decade. Based on the strong interest from investors, we are making plans to launch Hillview Partners Property Fund III.”
