Straits Trading buys UK business park assets from Brookfield

Gloucester Business Park occupies 276 acres along the M5 motorway in South West England

Singapore’s Straits Trading is adding to its UK property holdings with the acquisition of properties in a business park in the south-west English city of Gloucester for £130 million (157, $7 million).

The property arm of the SGX-listed conglomerate has agreed to buy seven office buildings, two industrial buildings and six land for development in Gloucester Business Park from Advanced Research Clusters, a property platform of asset management giant Brookfield. The Canadian company set up ARC last year after acquiring the Arlington Business Parks portfolio from US private equity firm TPG for £714m.

Once the deal is complete with Gloucester, Straits Trading will have added a second UK business park to its portfolio after acquiring property near London from LaSalle Investment Management for £76.7million in 2020.

“Following our acquisition of Bourne Business Park in Surrey, UK, we are delighted to acquire this portfolio of high quality retail assets in Gloucester Business Park as it fits with our overall investment objective in new economy assets,” said Straits Real Estate CEO Desmond Tang. Wednesday in a version. “It offers a balanced mix of recurring revenue at an attractive return, while offering increased return opportunities through the development of logistics warehouses – a sector currently in high demand.”

Scope for more industrial

Gloucester’s assets comprise 522,000 square feet (48,495 square meters) of net leasable area, including 311,000 square feet of office space and 211,000 square feet of industrial space, as well as the last remaining development plots in the 276-acre park. acres (111.7 hectares) along the M5 Motorway.

The development land includes five consented parcels for industry and logistics and a small gated parcel intended for retail, Straits Trading said. Plans call for the construction of up to 310,000 square feet of industrial buildings on the land.

Desmond Tang, CEO of Straits Real Estate

The existing office and industrial buildings are fully occupied, with a weighted average lease term of 8.7 years. Tenants include EDF Energy, Ecclesiastical Insurance, GE Aviation and Lockheed Martin.

TPG had acquired Arlington’s portfolio of 20 business parks in 2017 for around £500m from a joint venture by Australian developer Goodman and London-based Legal & General, before selling the assets to Brookfield in 2021.

CoStar Real Estate Information Provider reported in March that ARA Dunedin, a subsidiary of Singapore-based ARA Asset Management, was set to buy Gloucester Business Park for £135m, a deal that appears to be in doubt after Straits Trading announced this week .

Mingtiandi reported in 2016 that China’s sovereign wealth fund CIC planned to acquire three Arlington properties – Hammersmith Embankment, Oxford Business Park and Uxbridge Business Park – for £250m, but Hammersmith Park was ultimately sold. sold to Workspace Group for £120 million and the other two assets remain listed in the ARC portfolio.

British collection

In addition to Bourne Business Park, which Straits Trading acquired from LaSalle two years ago, the conglomerate has invested in four UK business parks through its partnership with a Savills Investment Management vehicle.

Savills IM announced in April this year that UK fund Value Boxes backed by Straits Trading and the family office of ARA founder John Lim had acquired two retail parks in England and one in Wales and Scotland for a total of £75 million.

The fund pursues a ‘contrarian’ strategy which aims to capitalize on the yields available from large retail outlets in UK suburban centers and exploit the mismatch between relatively low property prices and the high yields available in UK retail parks as that institutional investors focus on logistics. , data centers and other more fashionable segments of the market.

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Straits Trading revealed in a stock market filing last October that Straits Real Estate would commit up to £60m to the UKVB as part of a strategy to redeploy capital from its existing high-quality but low-return property portfolio into potentially more profitable property opportunities.