21 July 2021
LSPIM sells £45million industrial portfolio on behalf of Regional REIT
London & Scottish Property Investment Management (LSPIM) has exchanged contracts for the disposal of a £45 million industrial property portfolio on behalf of Regional REIT.
The completion is conditional upon the purchaser having in place the required financing. The deal reflects a net initial yield of 6.75% for the purchaser and is 7.5% above the property’s valuation at 31 December 2020. After capital expenditure, the sale represents an uplift of 18.0% from the acquisition price.
In line with the regional REIT’s stated strategy to exit the industrial sector in preference for higher-yielding regional office investments, this disposal marks the sale of 62% by value of its industrial holdings held at 31 December 2020.
Since acquiring the seven industrial properties, totalling 801,787 sq ft, in Bromborough, Erith, Nottingham, Scunthorpe, Telford, Winsford and Wisbech, LSPIM has carried out several asset management initiatives to increase value. These have included a series of renovations and the subdivision of some larger units to improve occupancy rates, rental income and capital values.
The proceeds from the disposal will be recycled into the group’s strong pipeline of higher yielding office investments to further diversify the portfolio by geography and income stream.
Completion is expected to take place in August 2021.
Stephen Inglis, CEO of LSPIM, said: “The disposal of this industrial portfolio at 18% above the acquisition price enables the recycling of capital into higher-yielding assets, where our bespoke asset management platform can best add shareholder value. This will also allow the company to continue to focus on its clear strategy of offering investors exposure to a geographically diversified portfolio of regional office assets.
“We look forward to providing a further update regarding the reinvestment of the proceeds from the sale in due course.”