8 May 2019

M7 acquires prominent Scottish industrial estate for new Middle Eastern separate account mandate

M7 Real Estate (“M7”), the pan European investor and asset manager, announces the acquisition of Tweedbank Industrial Estate, the largest industrial estate in the Scottish Borders, on behalf of a new separate account mandate for a Middle Eastern sovereign wealth investor. The asset was acquired from funds managed by Catalyst Capital for £4.57 million, reflecting an initial yield of 8.62% and a capital value of £39 per sq ft.

Tweedbank Industrial Estate comprises circa 115,000 sq.ft. (10,680 sq m) of industrial space and is 93% let to a range of occupiers with a WAULT of 4.52 years. The purchase is in line with the mandate’s objective of generating an attractive income return with opportunities to add value by leveraging the continuing strength of the industrial occupier market in the UK.

The asset is located close to Galashiels town centre and adjacent to the A1b3db746-b4d5-4c26-b0ff-817314e410c3, as well as being in close proximity to the new Tweedbank Railway Station, part of the new Borders Railway. The surrounding area is subject to wider development proposals including a new Premier Inn and business space, which are expected to enhance the estate’s position as the commercial centre of the local economy.

Euan Burns, Divisional Director at M7 commented: “This acquisition of a dominant asset in this location provides sustainable income but also offers future potential to add value through asset management. It also underpins M7’s commitment to the Scottish market after a very active 2018. We have identified a pipeline of transactions aligned to the strategy of this mandate, which we continue to progress.”

Guy Wilson, a partner of Catalyst Capital, said: “We are pleased to have restored Tweedbank Industrial Estate to near full occupancy following physical improvements to the buildings and the estate and the completion of our leasing programme. This is one of a number of sales we have recently realised for Catalyst European Property Fund 2 in line with the business plan.”

M7 Real Estate was advised by JLL and Catalyst Capital was advised by Savills.