M7 acquires assets for UK value-add fund

M7 REIP IX aims to generate an income return by investing across regional UK office, retail warehousing and industrial assets

M7 Real Estate (M7), a pan European investor and asset manager, has acquired four industrial and office assets in four separate transactions for a total of GBP16.5 million on behalf of the latest fund in its regional UK value add series, M7 Real Estate Investment Partners IX.

Following a first close in February 2020, which raised a total of GBP23.9 million of equity from UK, European and Asian based family offices and local UK councils, the capital has now been deployed. M7 REIP IX aims to generate an attractive income return by investing in a combination of long income and value-add investments across regional UK office, retail warehousing and industrial assets.

These latest acquisitions total 240,000 sq ft and comprise a 73,000 sq ft distribution warehouse in Bradford let to Transmec Group, the transport and logistics company; Christchurch House, a 27,000 sq ft office building in West Bromwich town centre, let to the Secretary of State; Trinity Park, a 101,000 sq ft mixed use industrial and office scheme in Wakefield with tenants including Wakefield Council and 2 Sisters Food Group; and Unit 6 on Roundwood Industrial Estate in Ossett, close to Wakefield, a 39,000 sq ft distribution warehouse let to British American Shipping Ltd.

The Fund portfolio now totals 452,000 sq ft split across the three sectors: 33 per cent in well located regional offices, 43 per cent in industrial and logistics and 24 per cent in strategically located long-let retail warehousing. At completion of these deals the Fund is 96 per cent let and provides a day one yield  in excess of 8 per cent from a range of tenants with strong credit ratings and an average unexpired lease term in excess of seven years.

David Ebbrell, Chief Executive of M7 Real Estate, says: These recent acquisitions which have all been completed during the pandemic are attractive additions to M7 REIP IX’s portfolio, providing a mix of secure income underpinned by strong covenants in locations where we expect occupier demand to remain robust. With our considerable in-house expertise, we have already identified a number of asset management initiatives across the portfolio including refurbishment and leasing activity in order to drive returns for our investors.