CPA®:18—Global, a non-traded REIT sponsored by W.P. Carey, has established a presence in Scotland with the acquisition of a 14-asset portfolio.
The assets were acquired from Cording Real Estate Group for a purchase price of $17.8 million (£10.6 million), excluding acquisition costs, and are located throughout six trade parks in Scotland.
The portfolio is made up of trade counter and industrial assets. Trade counter assets are usually high volume showrooms or light retail businesses that need some retail space and use the rest of the space for warehousing inventory and office purposes.
Trade counter assets are currently in high demand in the United Kingdom. Tenants usually include building merchants, trade suppliers, tool rental companies, car accessory suppliers, and quasi-retail occupiers. Tenants often prefer to be in established trade parks in order to develop a local customer base.
The portfolio is 90% occupied and leased to 24 tenants on a triple-net basis, with a weighted average lease term of 8.2 years. It is occupied by well-known Scottish companies, including Jewsons, South Ayrshire Council, City Electrical Factors, Howdens, and Saint Gobain. The portfolio will be managed by CedarWood Asset Management Ltd, an investment and asset management company that specializes in the UK industrial market.
“This transaction provides us with a strong, well-diversified portfolio of quality triple-net leased assets and is consistent with our strategy of investing in long-term income-generating properties,” commented Greg Butchart, Managing Director of W. P. Carey. He continued, “CedarWood will provide experienced hands-on management in order to maximize value of the assets for CPA®:18—Global’s investors.”
Paul Jenkins, Director at CedarWood Asset Management, added, “Given their European investing experience, capital resources and long-term investment strategy, we are pleased to be joining with W. P. Carey for the management of the Scottish trade counter portfolio and look forward to developing a long-term relationship with them.”
As of June 30, 2014, CPA®:18—Global’s portfolio was comprised of full or partial ownership interests in 24 properties, all of which were fully occupied and triple-net leased to 18 tenants totaling 5.3 million square feet. In addition, it had full ownership interests in two self-storage properties totaling 0.3 million square feet.