Paloma Capital, the independent, privately owned real estate investor, co-founded by Joe Froud and Jack Pitman, has sold a portfolio of 20 light industrial properties in the UK with a total lettable area of approximately 2.322 million sq ft (1.831 million sq ft of buildings and 0.491 million sq ft of industrial open storage) on behalf of its second discretionary fund: Paloma Real Estate Fund II LP.
The portfolio was acquired by Farran Investments with capital partner GoldenTree Asset Management for £193.25 million and the price reflects a yield profile of approximately 6.3% initial*, a reversion of 8% and a capital value of approximately £95 per sq ft**.
The portfolio is spread across the UK, with most of the assets in the Midlands and South. The largest assets are Exeter Trade Park, Exeter and Marrtree Business Park, Bradford with other significant assets located in Grantham, Nottingham, Bishop Auckland, Altrincham, Northampton and Birmingham. The portfolio consists of 145 units leased to 105 tenants with a weighted average unexpired lease term of 4.1 years.
Paloma specialises in acquiring smaller underperforming assets and its investment style combines intensive asset management with significant capital investment to optimise these assets’ performance potential.
Joe Froud, Co-founder and CIO of Paloma Capital, commenting on the sale said; “We acquired these assets in 20 individual transactions between 2018 to 2022,having launched Paloma Real Estate Fund II in 2018, and have since invested over £40million of capital on refurbishing and repositioning them. We are very pleased with how they have performed during our ownership and are delighted to have found a counterparty who recognises their potential”.
Jack Pitman, Co-Founder and COO of Paloma Capital, added “One of the biggest issues currently facing investors is a lack of capital distributions but through the combination of the sale of the Pintail Portfolio, and a major refinancing in our Dove Industrial Partnership, we have managed to return over £160 million of equity to investors of the last 6 months”.
Paloma Capital was advised by Knight Frank, Greenberg Traurig, Grant Thornton and Ogier whilst Farran & GoldenTree were advised by Newmark, Jones Day, PWC and Mourant.
* net of an Amazon fit-out rent that expires in 2027.
** assuming a 40% site cover ratio on IOS land.
AboutPaloma Capital
Paloma Capital is an independent and privately owned UK real estate manager co-founded by Joe Froud and Jack Pitman in 2015. Paloma focusses upon smaller underperforming assets that require creative asset management and capital investment to reach their full potential. The London based manager has raised £720 million of discretionary equity for four opportunistic value-add UK real estate funds launched between 2015 and 2022.
