Hillview acquires Birmingham campus for new £300 million UK regional office fund10 August 2020
Hillview Real Estate, the UK regional office investor, has acquired an office campus on the edge of Birmingham for Hillview Partners Property Fund III, a new £300 million value-add regional real estate fund.
In its first investment for the new fund, Hillview has bought three adjacent office buildings at Kings Court, a development of high-quality office suites at Birmingham Business Park, from Catalyst Capital for £9.7 million, reflecting a net initial yield of 8.72%.
The three buildings comprise six self-contained units at 2620-2650, totalling 51,503 sq ft in a range of suites from 1,500 sq ft to 17,150 sq ft. The occupiers range from SMEs to international technology companies. The weighted average unexpired lease term is 4.66 years.
Birmingham Business Park, located by the M42 in Solihull, is one of the Midlands’ most established commercial hubs, comprising 1.84 million sq ft over 148 acres.
Hillview was advised by Knight Frank and Catalyst Capital was advised by Gerald Eve.
Nadav Livni, founder of Hillview Group and fund manager of Hillview Real Estate, said: “Kings Court is an excellent first acquisition for our new fund, providing exactly the sort of opportunities for us to add value from upcoming lease events, refurbishment of units and regearing leases. I believe the six two-storey, self-contained units will be highly attractive to companies seeking occupational flexibility and safety in the post-Covid environment, enabling tenants to drive and cycle to work, as well as having excellent amenities in close proximity.
“The acquisition of Kings Court is in line with our long-held strategy of investing in well-located, multi-tenanted, institutional-quality properties in key cities and regions, which has been a major factor in us collecting more than 98% of the rent from our existing portfolio since lockdown began and illustrates the resilience of our focused approach.”.
Hillview announced the launch of Hillview Partners Property Fund III last month. The value-add fund is aiming to secure equity commitments of £150 million from investors. Using leverage, the fund aims to deliver a total net return of 12% per annum to investors, by investing £300 million in well-located, multi-tenanted, institutional-quality properties in key cities and regions with favourable supply-demand dynamics. Individual investments are expected to range between £10 million and £25 million and provide significant scope for value enhancement through active asset management, including repositioning of properties and restructuring of leases.
Hillview Partners Property Fund III continues the value-add strategy which Hillview Real Estate has successfully executed by transacting more than 1.2 million sq ft across 12 regional cities and follows the recent completion of the investment programme for its Hillview Partners Property Fund II.