Real Estate

BMO Property Growth & Income Fund - Barking industrial estate - sale completed!

We are delighted to announce the sale of our 25,000 sq. ft. multi-let industrial estate in Barking, East London for £7.26m
October 2020
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Risk Disclaimer 

Past performance is not a guide to future performance. The value of investments and any income derived from them can go down as well as up and investors may not get back the original amount invested.

The information, opinions, estimates or forecasts contained in this document were obtained from sources reasonably believed to be reliable and are subject to change at any time.

We are delighted to announce the sale of our 25,000 sq. ft. multi-let industrial estate in Barking, East London for £7.26m (net initial yield of 3.8%).  We bought the estate in 2015 for £3.5m (net initial yield of 5.4%) and over the 5 years we have owned it have re-geared one lease and re-let the other two other units.  This activity has seen the passing rent increase by 46% from £203,000 to £297,000.  Over the term of the investment the property has produced an ungeared IRR of 20%.

Both re-lettings this year took place after the start of COVID-19 – a fact that demonstrates the importance of picking the right properties in the right locations.

George Gay, Fund Manager

 

The sale price reflects a 18% premium to the pre-marketing independent valuation and a 46% premium to the independent valuation 12 months ago. The profit realised for the fund highlights the strength of demand from occupiers for industrial property, especially in Central London, and the investor appetite for such assets.  From our perspective however, we deemed the combination of current valuations and the completion of our active management activity as an opportune time sell and lock in gains.  In terms of reinvestment, we are using the proceeds to ensure that our portfolio – a blend of physical real estate assets and property via pan-European listed equities – remains balanced and will be adding to several favoured equity names.

 

Bought in 2015 for £3.5m, sold in 2020 for £7.26m

 

Read our latest fund update for the lowdown on our hybrid structure, active approach and favourite locations.

Risk Disclaimer

Past performance is not a guide to future performance. The value of investments and any income derived from them can go down as well as up and investors may not get back the original amount invested.

The information, opinions, estimates or forecasts contained in this document were obtained from sources reasonably believed to be reliable and are subject to change at any time.

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