London, 25 July 2017 - M7 Real Estate (“M7”), the pan-European investor and asset manager, announces that it has completed the acquisition of seven regional assets with an aggregate value of £23.7 million on behalf of M7 Real Estate Investment Partners VI (“M7 REIP VI” or the “Fund”). The Fund is now fully invested with a total portfolio value of £30.8 million. M7 REIP VI was launched in December 2016 to target multi-let, high yielding assets with attractive income profiles in key UK regional locations, underpinned by supportive fundamentals including the growing need of SMEs for flexible and high quality space outside of London.
The seven assets have been acquired in separate transactions, the largest of which is Felaw Maltings, a 108,879 sq ft office asset in Ipswich, from Kames Capital for £8.8 million, reflecting a net initial yield of 8.7%. The substantial Victorian redbrick building, known locally as Ipswich’s best multi-let office property, was converted into office use in the 1990s, and is fully let to a range of tenants including the Suffolk Enterprise Centre, recruitment specialists VPSS and engineering, environmental and building control consultancy MLM Group.
In addition, M7 has acquired:
- III Acre Princeton Drive, comprising three 90% occupied, modern Grade A office buildings totalling 32,913 sq ft, at the Teesdale Business Park in Stockon on Tees for £3 million, reflecting a NIY of 11.7%;
- Rivermead Court, comprising two fully let, two-storey, multi-let office buildings on the Kenn Business Park in Clevedon for £3.16 million, reflecting a NIY of 11%;
- Oldham Business Centre, a 45,367 sq ft office property in Oldham, Greater Manchester for £3.4 million;
- Merchant Gate at 1 Burbage Square in Wakefield, a 26,295 sq ft mixed-use office and retail development for £2.1 million;
- The Chilterns in Stokenchurch, Wycombe in Buckinghamshire, a fully let 10,478 sq ft modern office development for £1.85 million, reflecting a NIY of 8.1%; and
- Cromwell House in Lincoln, a 15,727 sq ft office property for £1.4 million.
Charlie Alcock, a Director at M7 commented: “The portfolio is currently yielding around 10% and, with average rental levels below historic averages, there are a number of potential opportunities to further enhance the income profile in the medium term.”
Richard Croft, Chief Executive at M7 commented: “As the number of SMEs continues to increase we are seeing constant demand for good quality multi-let space across the industrial, urban logistics and office sectors throughout the regions. Appropriate occupational space is integral to the success of SMEs and there is growth in the regions as businesses increasingly choose to base themselves outside of London, attracted by more affordable space in areas that can simultaneously present employees with better living standards. We remain a cautious investor in the UK albeit we remain committed to the market particularly where we believe there is limited correlation between a local occupier market and Brexit.”