Latest acquisition for Cordatus Property Trust.
LONDON, 24 September 2018 – Cordatus Property Trust (“CPT”) has acquired the ‘Mercor Portfolio’ – a package of 33 individual trade counter units let on long leases to Travis Perkins.
Cordatus Property Trust is a programmatic venture that is exclusive to clients of CBRE Global Investment Partners (CBRE GIP) and managed by Cordatus Real Estate (Cordatus).
CPT is paying £45.35 million for the assets which are spread throughout the UK, with 30% by value located in the South East. The vendor is joint-owner Avignon Capital and Riverside Capital. The deal reflects a net initial yield of 5.35%.
The portfolio offers the potential for long-term value creation. The units are all let on long leases with guaranteed rental uplifts backed by a strong covenant. The assets benefit from very low site density and offer the potential to add value through re-structuring leases and looking at alternative future uses and redevelopment.
Michael Cunningham, Cordatus Director, commented: “This is a substantial acquisition for the Cordatus Property Trust – our largest to date – and offers very attractive, long term value. It’s an opportunity for us to deploy our specialist skills to manage, re-gear and potentially redevelop the assets in line with our strategy of delivering an attractive income return to our investors with potential for capital growth. Since our first acquisition with the Lion Portfolio in late 2015, the Trust is going from strength to strength.”
Alex Bignell, Region Head of UK, CBRE GIP, commented: “We are very pleased with this latest acquisition by CPT. This portfolio purchase takes the total value of the CPT portfolio to approximately £175m demonstrating the ability of Cordatus, as one of our exclusive programmatic ventures, to achieve size while remaining focused on the quality of assets acquired.”
Cordatus and CBRE GIP launched the Trust in December 2015. The Trust continues to seek opportunities to invest in line with its investment objectives.
The vehicle is primarily targeting investment opportunities in strong micro locations, primarily in UK regional markets, with typical lot sizes of between £3m to £15m, to generate above market income distribution.
HSM acted for Cordatus and JLL acted for the vendor.
The Mercor Portfolio includes 33 trade counters with 100% of the income secured to Travis Perkins (Properties) Ltd. The total floor area is 432,292 sq ft on 41.40 acres (which means a very low average site cover of 24%). With sites located nationwide, the portfolio was represented in five regions (South East, South West, Midlands, North and Scotland). Each region contains between five and eight properties, making up the total of 33 assets.
Cordatus is a UK asset and development management specialist. Cordatus is fund manager for the Cordatus Property Trust, a recently-launched property fund focusing on sub £15m lot sizes across all sectors and regions of the UK property market. The fund has initial capital to invest of £150m.
Cordatus also specialises in the work-out of distressed portfolios and uses its specialist skills in partnering with institutional investors on selective opportunities.
Cordatus operates out of offices in Edinburgh, the Midlands and London. Our five property directors have over 130 years of asset and development management experience between them, largely within leading fund management and development companies. The directors are Tom Laidlaw, Michael Cunningham, Mike Channing, Gavin Munn and Paul Blyth.
Cordatus’ expertise is focused on asset management and value creation through the accumulated 130 years experience of its principal directors.
CBRE Global Investment Partners (“GIP”) is a division of CBRE Global Investors that delivers investment solutions customised for clients’ individual objectives, using private funds, club deals, secondaries, co-investments and programmatic ventures, partnering with leading operators for each strategy. Investments cover the risk spectrum from core to enhanced and use a variety of investment vehicles based on clients’ preferences.
GIP had equity AUM of $22.8bn* at June 30, 2018. Clients invest via separate accounts, which have a regional or global remit, and GIP’s pooled funds. Pooled solutions include a global perpetual core fund and regional enhanced return funds.
Notes: CBRE Global Investment Partners Limited is authorised and regulated in the United Kingdom by the Financial Conduct Authority (FCA).