Orchard Street acquires PT Portfolio for £96m

Orchard Street Investment Management LLP, the specialist commercial property investment manager, has acquired the PT Portfolio from Hermes Real Estate Investment Management Limited (HREIML) for £96 million, reflecting a net initial yield of 6.5%. The purchase was made on behalf of St. James’s Place Wealth Management.

The PT portfolio comprises six Greater London multi-let industrial estates located in the West London Corridor and within three miles of Heathrow Airport. With a total lettable area of 780,000 sq ft across 74 units, the entire portfolio is occupied by 59 tenants and has a weighted unexpired lease term of 3.92 years to break and 5.06 years to expiry. Tenants include Ricoh UK ltd, Sainsbury’s Supermarkets, Safestore Properties Ltd and Siemens PLC.

The assets in the portfolio are:

·        Blackthorne Road, Poyle

·        Stone Close, West Drayton

·        Trinity Trading Estate, Hayes

·        Bilton Way, Chesterfield Way and Pasadena Close, Hayes

·        Steyning Way, Green Lane, Hounslow

·        Feltham Corporate Centre, Feltham

Barney Rowe, Partner at Orchard Street, commented:

“We are extremely pleased to have secured this portfolio for St. James’s Place Wealth Management. All the properties are in close proximity to Heathrow, have good access to the motorway network and are typically let off low rents. There are several opportunities to re-gear and extend leases, as well as to complete refurbishment and redevelopment projects on some of the assets. Over the short to medium term, the flexibility we have to complete such a wide range of asset management strategies across the portfolio will provide significant potential to increase values and income.”

Chris Taylor, Chief Executive, HREIML said: “Following a successful asset management programme, we have seen an excellent return on investment from this portfolio. The decision to dispose of these assets is in line with our longer term strategy of wider portfolio diversification.”

Orchard Street were advised by Deloittes and HREIML by CBRE.