The 88 assets of debt-laden Spencer Holdings have been acquired by Hansteen for £150m in two separate lots.
Hansteen Holdings has acquired 44 assets in one deal and, in the second transaction, one of its managed funds, Hansteen UK Industrial Property Limited Partnership, has bought the other 44 assets.
Knowsley-based Spencer Group raised a £200m debt facility with Bank of Scotland in 2008, now part of Lloyds Banking Group, and the sales have been expedited by the bank, which also provided debt to Hansteen.
Spencer faced "material uncertainty" about its future according to its last accounts, having breached loan covenants last year. The company made a £3.5m loss on £15.7m sales in the year to April 2010. Finance costs were £14.7m. Founder Jim Spencer resigned from the company in September 2010. Only the assets and not the company have been acquired by Hansteen. No one from Spencer was available when contacted on Thursday morning.
The portfolio comprises 4.1m sq ft of predominantly industrial property located across the UK. Hansteen acquired 44 assets with a current rent roll of £6.0m and a vacancy rate of 41.6% for £75.2 million, representing an initial yield of 8.0%, or 8.51% excluding 37 acres of development land, satisfied by £33.9m of cash from existing resources and £41.3 million of new debt facilities provided by Lloyds Banking Group.
The fund acquired 44 assets, with a rent roll of £6.4m and a vacancy rate of 17.2%, for £74.8m, representing an initial yield of 8.5%, utilising existing and new debt facilities provided by Royal Bank of Scotland.
Hansteen said it has £300m remaining for further acquisitions. The fund, however, is now fully invested with gross assets of £166m and debts of £76m.
Morgan Jones, joint chief executive of Hansteen, said: "The portfolio is highly compatible with Hansteen's intensive management approach and the team's experience across the UK market. It has strong fundamentals and a high vacancy rate providing a great opportunity to create significant added value through improving occupancy and imposing our own approach."
Ian Watson, joint chief executive of Hansteen, added: "This substantial purchase completes the fund and will materially add to Hansteen's earnings and future growth potential without significantly reducing our available firepower."
Knight Frank advised Hansteen.