20/7/2020

CoStar News - Kimmre Advise M7/Kamco on multiple office acquisitions

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Kamco Invest and M7 Real Estate, the pan-European investor and asset manager, have completed the acquisition of three office buildings in three separate transactions across the UK - in Greater London, Bristol and out of town Glasgow.

Kamco Invest and M7 Real Estate, the pan-European investor and asset manager, have completed the acquisition of three office buildings in three separate transactions across the UK - in Greater London, Bristol and out of town Glasgow - CoStar News can reveal.

The transactions are supported by Aviva Investors, which has provided a newly originated senior debt facility towards the purchase of the office assets. The transactions are structured and distributed as a single transaction of Grade A regional UK office assets.

The properties, which extend over a total of 208,262 sq ft, are fully occupied by a number of investment-grade tenants including Everything Everywhere (EE), Scottish Power and Samsung Electronics, with an average unexpired lease term of 7.5 years. The investments will target a high single digit annual cash dividend.

Mohammad Al Othman, Executive Director of Real Estate at Kamco Invest, said: “We are delighted with this acquisition, which is in line with our strategy to grow our real estate platform with income generating Grade A properties which are let to creditworthy tenants. In fewer than five years, we have managed to build a successful track record, while expanding our international real estate platform to over $1bn in total transaction value. We are delighted with the partnership that has been established with M7 during this process and look forward to continuing to develop our alliance with the M7 organization.”

David Ebbrell, Chief Executive of M7 Real Estate, said: “We are excited to be working with Kamco Invest on this transaction and on future projects. The acquired properties are all located in markets which are experiencing a shortage of Grade A office supply and benefit from strong local market fundamentals, which we think will benefit from the trends we are seeing in regional office demand in a post COVID-19 environment. We look forward to managing these assets over the coming months.”

Hugh Fraser, Global Head of Capital Markets at M7, said: “It is great to close a new senior debt facility with Aviva Investors. Our team has developed a very close working relationship with Aviva Investors, which has enabled us to efficiently close this financing at competitive terms during these challenging market conditions.”

Gregor Bamert, Head of Real Estate Debt at Aviva Investors, said: “We are pleased to be building new borrower relationships, expanding our successful relationship with M7 and finding opportunities to extend our lending programme, despite the challenging environment. We believe that opportunities continue to exist in the market, particularly when lending against good assets with high-quality tenants in place. As such, this deal should deliver good performance for our investor clients as part of the overall portfolio. It also represents our first transaction with Kamco acting as sponsor and look forward to expanding our relationship in due course.”

Details of pricing have not been given but CoStar News understand the duo has bought Regus's home at Building 3000 at Hillswood Drive in Chertsey from Aviva Investors for around £23m or a 7.75% yield,.

Separately, Aviva Investors has agreed the freehold sale of a 76,258 sq ft office at Aztec West in Bristol to M7/Kamco in a £21m transaction representing a net initial yield of 6.75%. 2620 Aztec West is fully occupied by EE, and provides a rental income of £1,527,120 per annum.

The duo has also bought Scottish Power's 65,000 sq ft home at New Aspect House at Hamilton International Park near Glasgow. The building was on the market via Knight Frank for £15m or a 6.47% yield.

Aviva Investors has been pursuing a “cluster strategy” over the last three years where it it is reshaping its real estate portfolio to focus on fewer locations.

Knight Frank advised Aviva on the sale of the Aztec West and Hamilton asset; Kimmre is advising M7/Kamco on the acquisitions.

pnorman@costar.co.uk

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