Delin Capital buys InfraRed’s “Wave” logistics portfolio funded by cash-out Dutch portfolio financing

Delin Capital Asset Management (DCAM) has purchased five prime UK logistics assets from InfraRed Capital Partners for £66m and a single prime distribution warehouse in Cheshire out of receivership from Allsop for £15m.

DCAM logoDCAM funded the acquisition through a cash-out financing of a five-strong Dutch portfolio and additional equity in the €400m Capital Preservation Portfolio I, the company’s inaugural core plus logistics fund.

InfraRed sold the 1m sq ft five prime distribution assets at a net initial yield of 7.2% after allowing for rental guarantees, in a portfolio dubbed the Wave portfolio.

The Wave portfolio – comprising four fully let assets with a weighted average lease of 7.8 years and one vacant asset – consists of:

  • Castleford: a 382,000 sq ft warehouse located in the Normanton/ Wakefield Europort distribution hub, fully let to Exel UK Ltd with a guarantee from DHL Supply Chain Ltd on a lease expiring in 2022;
  • Doncaster: a 164,000 sq ft prime distribution/business park located on West Moor Park, five miles to the north east of Doncaster town centre let to The Scotts Company (UK) Limited until 2026;
  • Lutterworth: a 164,000 sq ft high spec distribution warehouse located on Magna Park within the ‘Golden Triangle’ let to DHL Supply Chain Limited on a lease expiring in 2023;
  • Rugby: a 212,000 sq ft also within the UK’s logistics ‘Golden Triangle’ currently vacant
  • Wednesbury: a 105,000 sq ft distribution warehouse located near Birmingham let to BTC Activewear until 2019.

DCAM’s sixth asset, a 353,000 sq ft warehouse called TITAN 350 in Cheshire’s Middlewich let to Kuehne and Nagel until 2017, was bought for £15m, reflecting a net initial yield of c. 7%, sold by joint fixed charge receivers Jon Gershinson and Ania Packman of Allsop which dates back to a defaulted German bank loan.

The acquisition of the six assets will complete by the end of January, after which DCAM will seek to finance the UK logistics portfolio, likely at a conservative 50% LTV.

The combined £81m purchase of the six logistics assets were funded through the proceeds of a cash-out financing for DCAM’s five logistics assets in the Netherlands – as well as spare fund equity –acquired piecemeal on an all-cash basis between summer 2012 and October 2013.

Düsseldorfer Hypothekenbank provided a €74m five-year senior fixed rate senior loan at 50% LTV, priced at circa 250 basis points.

DCAM’s 2m sq ft Dutch logistics portfolio, valued by DTZ in December at €148m, comprises the Son Distribution Centre in Eindhoven; the Waalwijk Distribution Centre; and two multi-tenanted distribution centres located in Tilburg and Born.

The Dutch portfolio is virtually 100% leased and currently delivers an annual rent roll of €11.3m.

DCAM targets income-producing distribution assets in core logistics locations to deliver investors indexed linked long-term income returns combined with real capital preservation in the core markets: UK, the Netherlands and Belgium.

DCAM was advised by Jones Lang LaSalle and CMS on the purchase of the Wave portfolio; InfraRed was advised by GVA and Taylor Wessing. DCAM was advised by CBRE and CMS on TITAN 350; DLA Piper acted for Allsop.

About CoStar News

Finance Editor, CoStar News
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