Bidders line up for Partridge, Titan and Beam as portfolio fever takes hold

Final bids are due in tomorrow for Columbus Capital Management’s 38-strong Partridge portfolio, which is expected to keenly bid at a 6.75% net initial yield for the secondary quality direct asset pool implying a gross sale price of circa £232.5m.

CoStar News understands that Brockton Capital and Dunedin’s contra-cyclical high yielding industrial joint venture is expected to submit a binding bid tomorrow, as well as Patron Capital, Blackstone and Harbert.

Also, slightly less keen, given the hot pricing, but still an expected bidder is Legal & General Property’s £1bn Industrial Property Investment Fund.

The Partridge portfolio is comprised of 38 assets over 3.2m sq ft, with an annual rent of £15.7m and a vacancy rate of 5.88%.

Columbus Capital, part of Schroders’ real estate investment and asset management business, put the South East-weighted portfolio up for sale at the beginning of September for £220.5m, reflecting a net initial yield of 7%.

JLL is selling the Partridge portfolio, which comprises 314 units with 228 tenants. Almost two-thirds of the portfolio is located within greater London and the South East, including sites in Battersea, Croydon, Heathrow and Hemel Hempstead.

The Partridge portfolio is one of a raft of secondary portfolios which have come to market in recent weeks, sparking a traditional end of year flurry of investment activity – buoyed by the receded uncertainty over the potential break-up of the United Kingdom.

Aviva Commercial Finance is set to select a four-strong shortlist to progress through to the second round on the 187-strong UK nationwide Project Titan portfolio.

First round bids came in last Friday for the direct property portfolio, retrieved from enforcement of defaulted loans.  

The four expected finalists are expected to be from Apollo Global Management, Tristan Capital Partners, Goldman Sachs Asset Management and Värde Partners.

Overall, Project Titan’s income is circa £21.1m per annum, while there is a vacancy rate of circa 10% relative to estimated rental value. The average weighted unexpired term of 4.0 years to break.

Project Titan is a highly granular secondary portfolio comprised of 187 properties spread throughout the UK and comprised of retail, some with residential, offices, industrial and leisure.

By geography, there are 42 properties in the South East and London; 41 properties in the North West; 29 properties in Scotland; 21 in Yorkshire & Humberside; 16 in South West; 13 in West Midlands; 10 in the North East; and finally seven, five and four in East Anglia, East Midlands and Wales, respectively.

There is a concentration of 59% of the portfolio in three main regions of the UK – the combined London and South East, the North West and Scotland.

By lot size, almost 90% of Project Titan comprises assets valued at £2.5m or below, with 16 assets up to £5m and just four properties above the £5m mark.

Project Titan’s covenant make-up is highly diversified, with the 15 largest tenants reflecting just 15% of the £21.1m.  The largest tenant in the portfolio, by net income, is Rank Group’s Gaming division, the European operator of bingo clubs and casinos, Mecca Bingo and Grosvenor Casinos.

Rank represents £1.88m, or 8.9%, of Project Titan annual net income, followed by VF Northern Europe, the provider of language recruitment and multilingual jobs in London, UK and Europe, with around £0.9m in annual net income.

Additionally, Project Titan’s tenant base includes government secretary of state premises, Santander, Morrisons, Tesco, Burton/Dorothy Perkins, New Look, WH Smith and Superdrug.

Second and final binding bids are slated for the end of October, with Aviva targeting a close for early November.

Elsewhere, Segro has appointed DTRE to bring to market Project Orbital, a portfolio of six multi-let industrial estates around the M25 for £102m, or a net initial yield of 7%.

Finally, bids are being called this week by Allsop, on behalf of the Aberdeen UK Balanced Fund, for Project Beam a mixed UK portfolio seeking £38m, or a 7% net initial yield.

The portfolio includes high street retail, retail warehousing, offices, supermarkets and a multi-let industrial estate.

All parties declined to comment.

jwallace@costar.co.uk and pnorman@costar.co.uk

About CoStar News

Finance Editor, CoStar News
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