Hansteen buys remaining AIF units for £39.5m

Investment company Hansteen Holdings has bought the further 86.5m units in Ashtenne Industrial Fund (AIF) that it did not already own for £39.5m and refinanced its UK and France portfolio.

Hansteen bought the remaining units from the British Airways Pension Trustees, the Royal London Mutual Insurance Society, Kames Capital and clients of Schroder Real Estate Capital Partners at a price unite of 45.65p each. The acquisition, which is expected to complete later this week, represents 14.41% of the units in issue and brings Hansteen's holding to 100%.

AIF, which owns about 11.3m square foot of multiple-let industrial properties in the UK, had a portfolio of 2,935 units at 227 estates at 31 December 2015, with a total annual rent of £34.7m and a vacancy of 12%. AIF’s property gross asset value was £436.4m.

Hansteen also refinanced its existing loan secured against its UK and France portfolios with a single loan facility worth £330m.

The new facility replaced the £95m corporate revolving credit facility from the Royal Bank of Scotland (RBS) and the £138.1m loan to AIF from lenders led by RBS, which are both due in July 2018 and October 2017 respectively.

Hansteen drew £280m of the facility, or 43.8% of the value ratio, which is hedged against 60.1% of the loan at 2.3% interest per annum, excluding fees.

The FTSE 250 listed company’s overall cost of borrowing reduced to 2.9% from 3.5% at 31 December 2015, with debt maturity increasing to 3.8 years from 2.6 years.

Hansteen's UK property director Derek Heathwood said: “The purchase represents the acquisition of c. £60m of property at a yield on the passing rent in excess of 8%.

“The investment further increases our exposure to the UK light industrial sector and our unique UK asset management platform of seven offices will enable us to drive value not only by reducing the void, but also by continuing to focus on rental growth which we are witnessing across all our UK regions."

Treasury director Janine McDonald said: "We appreciate the support of RBS, Barclays and HSBC in helping us to achieve the flexibility of funding that we have secured in this complex transaction. The new facility, consisting of a term loan and a revolving element, reduces the group's cost of borrowing and provides Hansteen with significant additional firepower."

Shares in Hansteen Holdings were down 0.10% to 104.50p at 0912 BST.