Stenprop expands UK footprint with nearly £17m of acquisitions
The company is seeking to become a UK-focused business in the multi-let industrial area, which it expects will be 60% of its portfolio by March 2020
JSE-listed owner of industrial parks Stenprop is buying assets at an aggressive pace while UK property trades at low prices amid Brexit uncertainty.
Stenprop said on Friday it had acquired a further 100 additional industrial units in the UK, spending £16.7m (R310m) in five separate transactions.
Stenprop is focusing on UK multi-let industrial properties. The company tends to rent space to entrepreneurial tenants and small manufacturing and services businesses.
CEO Paul Arenson has said the company's decision to become a focused fund will attract South Africans who are looking to invest in a rand hedge stock.
Stenprop’s largest SA shareholders include the Government Employees Pension Fund (GEPF), the Public Investment Corporation (PIC), Sanlam and 36One Asset Management. Arenson is also a shareholder.
The acquisitions included the Hillfoot, Armthorpe and Trident estates which were acquired from Westbrook Partners for £10.2m, reflecting a net initial yield of 6% for the 81 units.
The company also acquired eight fully let units at Forth Industrial Estate for £4.2m, at a yield of 6.6%.
After the transactions, multi-let industrial assets will account for 43.9% of Stenprop’s portfolio, the company said. Multi-let assets were expected to comprise about 60% of Stenprop’s total portfolio of properties by March 31 2020.
Stenprop executive property director Julian Carey said the acquisitions met the company’s requirements in terms of location and returns.
Stanlib head of listed property funds Keillen Ndlovu said Stenprop was small and liquid, and needed critical mass and inclusion in major indices to attract broader institutional attention.
Stenprop's share price was up 0.31% at R19.30 at 3pm on Friday, having risen 6% so far in 2019. In the year-to-date, the JSE’s property index has fallen 1.54%.