Elite Partners Capital on a growth path

/ EdgeProp Singapore
January 19, 2019 12:59 PM SGT
Singapore-based private equity firm, Elite Partners Capital, acquired a portfolio of 97 commercial properties across the UK last November. The portfolio, worth £282.15 million ($492.82 million), was purchased from Telereal Trillium, one of the largest privately-owned property firms in the UK.
All except one of the 97 properties in the portfolio have freehold tenures. The 97th property has a 250-year lease. About 85% of the office buildings are located in town centres and have a combined floor area of 2.6 million sq ft. About 99.4% of the rental income in the portfolio is secured against the covenant of the UK Secretary of State for Communities and Local Government. The remaining 0.6% in the portfolio is leased to shops, F&B and other amenities that serve the office users.
Scotland accounts for 26% of the assets in the portfolio of 97 properties acquired by Elite Partners Capital in the UK (Credit: Elite Partners Capital)
The portfolio is currently let to the UK’s largest government department, namely the Department for Work and Pensions. The lease is for 10 years with effect from April 1, 2018. “We were exploring logistics properties in Europe when we chanced upon this portfolio of assets in the UK,” says Victor Song, CEO and managing director of Elite Partners Capital. “I thought these UK office assets would provide sustainable returns to our investors given the good covenant strength, predominantly freehold tenure of the portfolio and the fact that the properties are diversified across the UK – from London, to East and West Midlands, the South and even to Glasgow, Scotland in the north.”

Land banking, asset enhancement

About 36% of the portfolio by income is situated in London, the South and the Midlands. Another 26% of the portfolio is located in Scotland, including a major asset in Glasgow City Centre.
The portfolio has cash-on-cash returns of about 11% and running yield of 8.3% per annum. It has potential for further gains with built-in rent uplifts in the range of 1% to 5%, asset enhancement and redevelopment.
Some of the buildings in the portfolio sit on huge plots of land that have yet to be fully developed, while others are located near public transport facilities such as train stations or bus interchange, notes Song. The...