MCR benefits from quiet market as deals line up

MCR Property Group expects to complete acquisitions totaling between £50m and £100m in the second half of 2008, investment director Mark Hayes said.

The Manchester-based firm, owned by Aneel Mussarat, has spent around £75m on half-a-dozen acquisitions so far this year and has numerous further assets under offer.

Hayes said: "We have bids in for 12 buildings at auctions in London in the next ten days alone. This market presents a good time to buy for us because there are less people playing."

Hayes said MCR was increasingly looking at buying dry commercial investments offering strong covenants where tenants have 15 years or so left to run, at yields in excess of 7%.

Deals this year include No 2 Moorfields, Liverpool for £10.75m; the Illustrious portfolio from Legal & General for £33m and Cornbrook, Old Trafford for £7.5m.

The MCR portfolio, built historically on student accommodation, is weighted 60:40 towards residential and the firm is still looking to acquire large residential portfolios with two deals currently being negotiated, for 200 and 50 units respectively.

The development pipeline is also looking healthy, according to development director Andy Phillips. He said funding was in place from Kaupthing Singer & Friedlander for the 28-storey Regent Street tower in Manchester with a start on site due by the end of 2008.

The £100m scheme comprises 221 apartments and 98 serviced apartments, all of which will be retained by MCR, 27,000 sq ft of offices, 10,000 sq ft of retail and 200 car parking spaces. Completion is due in 2011.

Phillips said the MCR track record meant bank funding was not proving a problem and the development programme was not being slowed by the market.

The value of the investment and development portfolios combined recently exceeded £1bn.

Other development projects coming forward include:

  • Hathersage Road, Manchester, 194 residential units. Completion autumn 2008
  • Queensway, Rochdale Road, 190 homes and 15,000 sq ft of retail. Completion 2009. End value £40m
  • 9 Portland Street, Manchester, refurbishment to provide 50,000 sq ft offices. Completion 2009. End value £30m

MCR has an annual rental income from commercial space of £17m. The firm is due to relocate to one of its buildings on Wilmslow Road, south Manchester later this month.

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