119-year-old FTSE 250-listed investment trust moves weighting of physical assets back towards 10 per cent
TR Property Investment Trust (TR Property) has acquired two industrial units, the Trust’s first acquisitions since 2015. These strategic ‘off market’ acquisitions, in Northampton and Bicester, are part of the Trust’s ongoing focus on building up its physical portfolio in core rental growth markets as it doubles down on light industrial, one of the investment team’s favoured sectors.
The property in Bicester, Oxfordshire, purchased for £16.05 million at a 5.75 per cent net initial yield, is a 120,000 sq ft multi-let industrial estate located in Bicester’s primary industrial area. This asset presents significant potential for value creation through proactive asset management, including enhancing lease terms and increasing rental rates. Additionally, with existing EPC ratings of ‘C’ and ‘D’, there is substantial opportunity to collaborate with tenants on sustainability initiatives such as the installation of photovoltaic (PV) systems. This would build on the recent ESG refurbishment of another TR Property physical asset, Ferrier Street Industrial Estate in Wandsworth, London where an A+EPC rating has been achieved.
The Northampton property, acquired for £3.25 million at a 7.5 per cent net initial yield, comprises a 30,000 sq ft light industrial unit. The property has a remaining seven-year lease term with a rent review scheduled in two years.
Whilst TR Property is best known as an investor in real estate investment trusts (REITs) and other listed property companies, it can hold up to 15 per cent of its assets in physical UK real estate. The Trust’s closed-ended structure means it is invulnerable to the illiquidity and gating issues that have dogged the open-ended property fund sector.
George Gay, Direct Property Fund Manager at TR Property comments: “These acquisitions mark our first foray back into purchasing physical assets for almost ten years and underscores our focus on core rental growth markets such as light industrial. Our investment team has long recognised the resilience and growth potential of light industrial assets, particularly in light of UK businesses efforts to de-risk global supply chains”
“As we aim to move our direct weighting closer to 10 per cent, we continue to search for further acquisitions.”
TR Property were advised by C Squared and Mishcon De Reya on Bicester and TDB Real Estate and Womble Bond Dickinson on Northampton.
About TR Property Investment Trust
TR Property Investment Trust is listed on the London Stock Exchange (ticker: TRY). The trust was set up as an investment trust in 1905 and has focused solely on the property sector since 1984. It offers diverse exposure to the UK and European property market, primarily through real estate equities and a small proportion of UK physical assets, seeking long-term capital growth and a growing dividend. TR Property’s core management team has worked together for more than 20 years, led by fund manager Marcus Phayre-Mudge.
Capital at risk. Approved by Columbia Threadneedle Management Limited on 25/11/2024.
