UBS Asset Management's Real Estate & Private Markets has announced that its UK-focused diversified real estate fund has completed the disposal of the Perth Trading Estate in Slough to SEGRO plc for £32.5 million.
The sale reflects a substantial uplift in capital value from purchase and crystallises a total return in excess of 14% per annum during the four-year hold period. This transaction will contribute significantly to the Fund’s fourth quarter performance and is in line with its strategy of recycling returns from assets which have performed well into investments where there is a greater opportunity to generate value.
The Fund acquired the 132,000 sq ft property in January 2017 for approximately £19m. Since acquisition, UBS-AM has deployed a successful asset management plan, allowing for the subsequent re-gearing of leases, and secured two significant new lettings. Combined with the refurbishment of one of the units in the property, the leasing activity increased the contracted rental income across the estate by 30%.
The 10-unit asset is fully let to a range of diversified tenants and located in one of the UK’s leading industrial hubs. It presented a compelling investment proposition for the new owner given SEGRO’s significant existing presence in Slough.
Howard Meaney, head of Real Estate UK at UBS-AM Real Estate & Private Markets, commented: “This sale has allowed us to generate substantial returns for our clients, both through the timing of this investment and by unlocking significant value through active asset management of this property. We maintain our long-held conviction that high-quality multi-let industrial assets in strategic locations present strong opportunities, but will look to selectively sell assets when we believe we can create stronger returns by shifting capital into other investments.”
UBS-AM REPM was advised on the disposal by TT&G, while SEGRO was represented by JLL.