SREF continues industrial push with new hire, acquisition and completion of 345,000 sq ft of transactions

Hartlebury Trading Estate

Schroder UK Real Estate Fund (SREF) has signalled its intent to continue to invest in industrial assets after announcing a new hire to its team and the completion of 345,000 sq ft of transactions across its portfolio.

SREF, with £2.3bn of assets under management, also revealed that it has completed the acquisition of 117 Hartlebury, a two-acre freehold site. Since acquisition, a planning application has been submitted for the development of five units, totalling over 27,000 sq ft, with an estimated rental value of £200,000 per annum.

The new units will expand SREF’s presence at Hartlebury Trading Estate which is a 1.5 million sq ft industrial estate serving the Midlands consisting of 116 tenants which include multi-nationals and local businesses.

Alongside the acquisition of 117 Hartlebury, SREF has appointed Edward Atkin to the Investment Management team. Edward joins from CBRE where he held the role of Senior Surveyor. At SREF, Edward will be responsible for helping manage the Fund’s industrial portfolio and will work alongside Phil Scott who joined the team last March as an Investment Manager for SREF’s industrial assets.

Since the start of 2021, over 345,000 sq ft of transactions have taken place across SREF’s industrial portfolio. At Hartlebury Trading Estate an agreement for the lease of a new 30,000 sq ft unit for a 15-year term was exchanged with ETAC Holdings, meanwhile a rent review of Unit 137 at the site was completed to The Blue Cross. Further rent reviews also took place across 46,243 sq ft of space at Woking Business Park and Matrix, in Park Royal, helping to increase headline income at both assets. Meanwhile at the Arenson Centre in Dunstable, SREF secured the reversionary lease of units 2, 3 and 4a to Sika Ltd and unit 5 to AP Taylor, both for 10-year terms, making up a combined area of 207,195 sq ft, and significantly increasing headline income at the asset.

One of SREF’s strategic priorities over the next 12 months is to grow income through initiatives including developing industrial assets on existing sites and maintaining the portfolio’s defensive qualities through asset management. New investment will focus on sustainable higher yields and opportunities driven by structural change, such as demographic change and the growth of new technology, as well as the growing demand for assets with high sustainability credentials.

Rob Cosslett, Interim Fund Manager of Schroder UK Real Estate Fund, commented:

“The UK industrial sector was the star performer over 2020, and we believe 2021 will see a continuation of this trend. Covid-19 has not only fast-forwarded the growth of online retail, but it has also prompted manufacturers and retailers to review their supply chains and hold extra stocks of key items. To cater for this growing demand for space we are continuing to develop and refurbish our existing industrial assets, and this includes the recent acquisition of 117 Hartlebury, which significantly expands our presence at this well-performing asset.

“We are also delighted to welcome Edward to our team. He will be working alongside Phil Scott to continue the highly proactive work that the team has handled throughout the pandemic, which has involved direct negotiations with over half of SREF’s tenants and helped to secure long-term lettings, thereby securing high quality and resilient income for our investors. Edward will also support the fund as we continue to seek further opportunities to grow the industrial portfolio by recycling the proceeds of the sale of Electra Business Park in Q4 2020 through the redevelopment of existing assets, as well as the acquisition of well-performing and undervalued assets.”