14 Jul 2015
M7 Fund Sells Manchester Assets to Crystallise Almost Threefold Return in Eight Months
London, 14 July, 2015 – A fund advised by M7 Real Estate, the pan-European investment manager specialised in multi-let properties, has sold two office buildings in the Greater Manchester area that it acquired eight months ago, crystallising an almost three-fold return from the assets.
M7 Real Estate Investment Partners II (M7 REIP II) sold the properties in Altrincham and Salford comprising a total of 52,600 sq ft of lettable space to private buyers. The combined sale price of £7.34 million reflects an 8.7% net initial yield. The properties generated a 2.6-fold return on equity for M7 REIP II, whose investors benefitted from rising UK regional property values and improved rental income from M7’s asset management initiatives.
Richard Croft, M7 Real Estate’s Chief Executive Officer, said: “These returns reflect the opportunity that we spotted in the mismatch in U.K. regional property values. Strong demand for high-yielding assets continues to lift values and compress yields, which bodes well for the fund’s other investments once we have achieved our various business plans for them, probably later this year.”
M7 REIP II is the first fund established by M7 for third party investors. It raised £16.1 million of equity from high net worth individuals in December 2014 to invest in multi-let properties in regional locations of the U.K.
Last month, M7 established a second fund, M7 European Real Estate Investment Partners I (M7 EREIP I) to focus on opportunities in Continental Europe. It deployed the capital raised from the first close to acquire a portfolio of eight German retail properties for €46 million and is targeting a €24 million second and final close in the coming months to acquire additional German retail assets.