Hansteen still has plenty of firepower after purchase

Hansteen, the investor in UK and Continental European property, has bought up the entire property assets of The Spencer Group of Companies, a commercial property specialist.

Hansteen is paying £150m for some 88 assets totalling 4.1m square feet of predominantly industrial property located across the UK.

Hansteen is paying £75.2m for 44 of the assets,a price which gives an initial yield of 8.0%, or 8.51% excluding development land. The 44 assets have a combined current rent roll of £6.0m, after deduction of head rents, and a vacancy rate of 41.6%.

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The £75.2m price tag comprises £33.9m of cash and £41.3m of new debt facilities provided by Lloyds Banking Group.

The other assets have been acquired by Hansteen UK Industrial Property, a fund managed by Hansteen and in which the real estate investment trust is a co-investor.

The assets being acquired by Hansteen UK Industrial Property have a current rent roll of £6.4m, after deduction of head rents, and a vacancy rate of 17.2%. They are being acquired for £74.8m, representing an initial yield of 8.5%, using existing and new debt facilities provided by Royal Bank of Scotland.

Following this transaction, assuming gearing of 50% loan-to-value (LTV), Hansteen has firepower of around £300m for further acquisitions.

The Hansteen UK Industrial Property fund is now effectively fully invested with gross assets of £166m and debts of £76m.

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