11 Apr 2011

LIPP acquires three further assets and re-finances debt

11th April 2011 – The Light Industrial Property Partnership, the JV between Europa Capital Partners and M7 Real Estate, has acquired three further assets for a total price of £8,400,000. The assets acquired were the Corngreaves Industrial Estate and the Central Trading Estate in Cradley Heath and Unit 17, let to Exception PCB Ltd, on Ashchurch Business Centre, Tewkesbury.

The Exception PCB unit is adjacent to LIPP’s existing holding on the Ashchurch Business Centre and is fully let for a further 8 years. The unit was acquired for £2.7 million reflecting a net initial yield of around 11.5%. Matthew Cheyne, a partner at M7, commented “The acquisition improves our critical mass in Tewkesbury and improves the management control of the estate. The unit benefits from a long term secure income stream and we are pleased to have added this to our existing holding.”

The assets in Cradley Heath were acquired for a combined price of £5.7 million. The initial yield of the transaction is around 8.0% rising, through fixed uplifts, to nearly 9.25% within the first year. There is substantial opportunity to improve the yield further through the letting of vacant space. These three purchases take the total assets acquired in LIPP to over £45 million.

In addition to these acquisitions, LIPP re-financed its debt with the Nationwide Building Society replacing West Immo as the Partnership’s senior lender. The new facility also provides for further acquisitions. The transaction was led by Nationwide’s Senior Lending Manager, Barry Worth.

Bryce Glover, divisional director for Nationwide Commercial, said: “We are delighted to be able to support the Light Industrial Property Partnership through the provision of our sector expertise and through this funding facility. Nationwide continues to write quality new business and this deal is just another example of this commitment. This financing will help LIPP to continue to develop their growth and acquisition plans.”

Rob Sim, Head of Northern Europe for Europa Capital Partners, added: “ We are delighted to have secured the new financing arrangement with Nationwide Building Society, which has enabled us to take further advantage of the current market conditions and acquire further assets at attractive prices.”