An Aberdeen property developer’s investment arm has snapped up a Granite City industrial estate in a cash and shares deal worth £2.6million, signalling its confidence in the local market.
Drum Real Estate Investment Management (DREIM), which manages the Drum Income Plus real estate investment trust (Drip Reit) on behalf of Aberdeen’s Drum Property Group (DPG) paid £1million in cash and shares worth a total of £1.6million for Burnside Industrial Estate.
DREIM did not name the seller but said it used about 1.6million shares of a near £2million share sale as part-payment in the deal.
Bryan Sherriff, managing director at Edinburgh-based DREIM, said: “The acquisition at Burnside adds our first industrial property to the portfolio, and offers the opportunity to improve the prospects for income and capital growth for Drip Reit.
“The acquisition also widens the geographical spread of the portfolio as we continue to target key regional locations throughout the UK.”
Mr Sherriff said the oil and gas downturn had created pockets of investment opportunities in Aberdeen, where “we believe the industrial cycle is well-priced at the moment”.
Burnside, in Wellheads Road, Dyce, offered an attractive investment yield of more than 10% annually, he said adding that a vacancy at the site was quickly filled earlier this year.
The estate comprises six industrial units, arranged in two rows, with a central forecourt area and office building at the entrance.
It extends to 22,204sq ft of workspace, plus a yard area of about 4,000sq ft and office accommodation totalling 7,941sq ft over two storeys.
Current tenants include Luton-based SKF (UK) and Burnside Estate-headquartered oil and gas services firm Precision Pumping and Metering.
Drip Reit’s latest acquisition takes the number of property assets in its fast-growing portfolio to eight, worth nearly £50million.
The Reit was launched on the London Stock Exchange by DPG, the developer behind the Prime Four business park at Kingswells, Aberdeen, just last year
Other investments for the investment vehicle to date include the £4.5million purchase of Duloch Park retail park in Dunfermline, a £4.4million deal for 24,000sq ft of Grade A office space in Edinburgh and the £12.25million acquisition of Gosforth Shopping Centre in north-east England.
Reits receive special tax considerations and typically offer investors high yields.
