M7 finds resilience in regional offices through strong leasing

M7 Real Estate (“M7”), the pan-European investor and asset manager specialising in multi-tenanted regional real estate, announces that it has completed four lease renewals on behalf of M7 Real Estate Investment Partners III (“M7 REIP III” or the “Fund”) across c. 96,600 sq ft of regional office space generating a total rent of £1.32 million per annum.

Lease renewals have been agreed with strong covenants including The Secretary of State at Graeme House, Liverpool; Diamond Resorts at Citrus House, Lancaster; the NHS at Puma Court and Pure Legal at Tiger Court, which are both located on the Kings Business Park in Knowsley, Merseyside.

M7 REIP III was launched in 2015 and invests in high yielding regional properties in the UK with attractive real estate fundamentals. Its strategy is to deliver opportunistic, risk-adjusted returns by targeting smaller, mixed-use underperforming assets that do not have a traditional home in the market and implementing asset management initiatives to improve income at the same time as exploiting historically low funding costs to establish a substantial income carry trade.

The Fund’s portfolio currently comprises nine assets totalling c. 451,000 sq ft of office and industrial space. All of the transactions were agreed and completed in the last few months during the COVID-19 pandemic.

Victoria Lane, Asset Manager at M7, commented: “Completing these lease renewals during COVID-19 demonstrates that regional office space continues to be in demand and also illustrates M7’s local asset management expertise.

“We worked closely with the individual tenants to ensure that the terms agreed provided them with the assurance and means to plan ahead for the next three to five years. As a result, the Fund has a greater level of stabilised assets with a stronger income profile over the longer term, as per the business plan.”