CoStar News provides an update on 10 live deals up for sale which we have had visibility of as the end of year deal momentum gathers pace. Some market sources suggest there is as much as £2bn up for sale. Stay tuned to CoStar News as details of further portfolios emerge.
Blackstone hasbrought forward the initial first round deadline date slightly and is expected now to go to straight to under offer status before the end of the week.
Project Webb is majority comprised of assets acquired from the GE Capital Real Estate loan portfolio with a small number of assets from Max Property Group transaction.
CoStar News understands more than six first round bids were received, including Oval Real Estate with RevCap, Ares Management, Patron Capital with APAM and Harbert with XLB.
Blackstone’s asking price was £215m, which reflects a 7.95% net initial yield and 7.07% triple net initial yield, based on purchasers’ costs of 5.8%.
Project Webb is comprised of 46 assets, 39 are multi-let over 1.5m sq ft. In total there are 24 offices, 17 high street and five retail assets. By income, the weighting is 72% office, 16.5% high street retail and 11.5% retail warehouse.
Gross portfolio rent is £18.1m, while net income is £16.1m across 234 tenants. WAULT to expiries is 4.9 years and 4.1 years to break. Fully let, the portfolio could command £20.6m in annual rent. The currency vacancy spans circa 198,000 sq ft, which reflects 13%.
Northwood Investors has called for bids this week for the 12-strong Rainbow portfolio, comprised of five offices and seven industrial properties over 1.14m sq ft.
The Rainbow portfolio – comprised of assets acquired in the £635m Highcross deal in December last year – includes two challenging assets which comprise 40% of the portfolio by income, the 146,936 sq ft office block in Aylesbury, let to HBOS, and the 71,651 sq ft office block in Aztec West in Bristol.
Northwood is seeking £80m, which would reflect a net initial yield of 10.1% and a potential reversionary of 12.4% based on estimated rental value (ERV).
However, the net initial yield will drop to 8.7% in December following EE Limited vacating the Bristol office.
Fewer bidders are expected for this portfolio, which are understood to include Patron Capital with APAM, and Cording Real Estate.
Total gross annual income is £8.5m, with 30 of the portfolio’s 86 tenants accounting for 84% of portfolio income. Approximately half the income (49%) comes from South East-based properties. The portfolio vacancy amounts to 94,115 sq ft, reflecting 8.2% of the portfolio.
Second round bids are expected to be submitted from three finalists for Goldman Sachs’ Omega portfolio this Wednesday.
Goldman Sachs acquired the assets in the Omega portfolio through various small portfolio deals and single asset purchases from Aberdeen Asset Management and Aviva Investors over the past three to four years.
CoStar News understands that Mansford had informally offered to buy the retail and industrial assets only from the Omega portfolio, but Goldman Sachs is looking for a complete portfolio trade and it ultimately did not bid.
Six first round bids were initial received which has been whittled down to three, including Ares Management which has made three shortlists so far.
The Omega portfolio is comprised of 26 assets over 1.6m sq ft, comprised of 11 offices, 8 industrial assets and 7 retail properties.
Goldman Sachs was seeking offers in excess of £127.75m, reflecting a 9.21% net initial yield after 5.8% purchaser’s costs.
The Omega portfolio has an annual rent (after top-ups and guarantees) of £12.5m, equating to a modest £9.02 psf, from more than 250 tenants. The current vacancy rate is 13.14%, or 208,573 sq ft. The portfolio has a WAULT of 5.45 years to expiry and 4.08 years including break options.
Osprey Equity Partners has called for bids for the circa £180m-valued Navigator portfolio on Friday (6 November).
The Navigator portfolio is comprised of three sub-portfolios owned by its series of Osprey Income and Growth fund, which consists of:
• Aldi-backed retail developments at St Neots, Kingston upon Hull and Leeds, offered individually or as a portfolio;
• Hotel portfolio: 131-bedroom hotel on Windsor Road, Slough, fully pre-let to Premier Inn on a 25 year, inflation-linked lease; and a 72-bedroom hotel in East Grinstead, West Sussex, fully pre-let to Travelodge on a 25 year inflation-linked lease.
• Foodstore portfolio: a £45m Sainsbury’s superstore in Hinckley, Leicestershire let on a 27-year lease; a £22m Tesco superstore in Chatteris, Cambridgeshire let on a 25-year lease; a £41m Tesco superstore in Rotherham let on a 30-year lease; and a £37m Sunderland superstore let to Sainsbury’s on a 25-year lease.
Term sheets for any finance required are requested to be submitted with the bid. CBRE is selling the Navigator portfolio on behalf of Osprey Equity Partners.
LaSalle Investment Management, on behalf of its client The Mars Pension Fund, has a challenging portfolio in the market, the Best Network Portfolio, also known as the Science Park portfolio.
The BEST Network is the largest privately-owned portfolio of science and technology parks in the UK and includes both well-established and unestablished parks. The five-strong portfolio is comprised of:
• Edinburgh Technopole;
• Hexagon Tower in Manchester;
• Kent Science Park, Langstone Technology Park in Havant;
• Stoneleigh Park in Warwickshire; and
• Wilton Centre in Teesside.
The Mars Pension Fund is seeking £100m, which reflects a 12.5% triple net yield, equating to a capital value of £75 per sq ft.
Some of the parks in the portfolio have high vacancies, such as Wilton Centre which is circa 50%, with the revenue loss compounded by park maintenance costs and empty rates.
Fasset, the property and facilities management specialists, is a tenant at Langstone Technology Park with a 4.7 years unexpired lease and also has a management contract across the entire portfolio.
Fasset itself could emerge as a potential bidder, although debt finance is expected to be challenging.
Bids are also in this week for Threadneedle’s Scottish-only Project Loch portfolio, seeking in excess of £25m, reflecting a net initial yield of 8.53%. Allsop is advising.
A Scottish-based buyer for the portfolio is thought most likely.
Project Loch is a mixed use portfolio comprising nine individual assets located in core commercial locations across Scotland.
The portfolio comprises a trade counter, distribution warehouse, two office and five retail/retail warehouse units totalling 261,836 sq ft, of which 50,618 sq ft is A1 retail accommodation.
The portfolio is let to 13 tenants generating a total income of £2,267,311 per annum, reflecting modest £8.66 psf overall. Future fixed rental increases in 2017 and 2022.
Tenants include: Yodel Delivery Network Limited, Saint-Gobain Building Distribution, Halfords Limited, Next Plc, Everything Everywhere Limited (EE), Hutchison 3G UK Limited (Three Mobile) and Bank of Scotland Limited.
The average weighted unexpired lease term (AWULT) is 6.37 years to expiry and 5.32 year to breaks.
There is a low vacancy rate of 4.53% with good historic tenant retention. 83% of the income is secured against national covenants with 45% secured to tenants with a 5A1 D&B rating.
Threadneedle has recently brought to market the Waterloo portfolio of predominatly South East industrial assets for circa £130m via JLL.
Initial bids are expected within the next three weeks.
Market sources suggest L&G Investment Management’s Industrial Property Investment Fund (IPIF) as well as Brockton Capital are likely to be interested parties.
Bids are expected this week also on Segro’s office portfolio – Bath Road Frontage – with bids in excess of the £326m guide price or 6.25% yield expected given quoted prime yields in the South East are between 5.5% and 5.75%.
As reported by CoStar News last week, bidders are expected to include: AEW, Northwood Investors, Northstar, Varde Partners, Apollo with M&M, Ares, Brockton with Landid.
Elsehwere Industrial Ownership (IO) is marketing the Lion portfolio via Lewis Ellis for circa £23m.
The UK industrial portfolio carries a circa 15.5% vacancy.
Finally, Europa Capital has put the Flexspace portfolio, a collection of flexible workspace assets, up for sale with a guide price of £28m, a yield of 8.5%.
Savills is selling the portfolio which is managed by Ream Capital Partners.
Bids are due within the next 10 days.