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Local private equity firm Elite Partners Capital announced on Monday (26 Nov) that it has purchased a portfolio of 97 freehold offices with a combined area of 2.6 million sq ft in the UK for £282.15 million (approx. S$508 million) from major British developer Telereal Trillium.
In particular, 85 percent of the properties in Hayhill Portfolio are strategically located in town centres across the UK, and around 99.4 percent of the rental income is secured by a contract with the country’s Secretary of State for Communities and Local Government.
The portfolio is currently rented out to the Department for Work and Pensions, the UK’s biggest government department, for 10 years from 1 April 2018 to 31 March 2028. The lease agreement comes with rental uplifts, as well as clauses stipulating that the tenant will bear the responsibility for insuring and repairing the office properties.
“We are very pleased that our Elite U.K. Commercial Fund has been able to seize this rare opportunity to acquire a substantial core portfolio of quality offices. With attractive geographical spread, let on brand new leases to the undoubted covenant of the UK Government, the portfolio offers low-risk sustainable long-term yield,” said Elite’s CEO and Managing Director Victor Song.
Moreover, the move represents the first major deal undertaken by the private equity firm’s Singapore-domiciled Elite UK Commercial Fund that focuses on investing in properties in the country.
So far, the fund has amassed a war chest of £120 million (approx. S$216 million) in equity and mezzanine funding from over a dozen family offices, institutional investors and ultra-high-net-worth individuals.
Elite Partners Capital is an alternative asset manager specialising in high-yielding global assets. It was established last year by three founding partners – Chiew Chuanjin, Charles Hoon and Victor Song, who is also a founding partner of Viva Industrial Trust, which has since merged with ESR REIT.
“The investors of the fund can expect strong and stable income, coupled with potential upside from rental reviews and capital gains through asset enhancements and conversion for alternate uses. We will continue to look into acquiring new assets for this fund,” noted Song, adding that Elite will implement asset enhancements to the boost the portfolio’s value.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
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