The largest privately owned network of science and technology parks in the UK has been put up for sale by the Mars Pension Fund.
26 Nov 2015Mars, along with fund manager LaSalle Investment Management, has put a £95m price tag on the five-strong portfolio in what will be a litmus test for investor interest in the sector.
CBRE has been appointed to sell the portfolio, aptly named the Science Park Portfolio, and is quoting a yield of 14.8% and a triple net yield of 7%.
The portfolio covers 348 acres across five sites, which include Langstone Technology Park, Havant, Hampshire; Kent Science Park, Sittingbourne, Kent; Hexagon Tower, Manchester; Wilton Centre, Teesside; and Edinburgh Technopole, Edinburgh.
All the parks were acquired by LaSalle, on behalf of Mars, to form the Business Environments for Science and Technology (BEST) network, which has grown since its first acquisition in 2002 to become the largest privately owned portfolio of its kind in the UK.
Its most recent purchase was Edinburgh Technopole, which the pension fund acquired for around £7m in 2012 from Grosvenor.
The park is the biggest of the five, at 126 acres, but has considerable development opportunities given that just four buildings totalling 89,500 sq ft occupy the site. It was set up in 2000 as a joint venture between the University of Edinburgh and Grosvenor and has the potential for a further 500,000 sq ft of space.
In total, the portfolio spans 1.35m sq ft of lettable space and has a vacancy rate of 20%. It produces an annual rent roll of £15m from its 211 tenants.
Science parks have proven “surprisingly resilient” for investors, according to Colliers International. It calculates that average annual take-up since the recession, between 2008 and 2012, was 400,633 sq ft, compared with 331,311 sq ft between 2000 and 2007.
“Take-up since the onset of the credit crunch has been surprisingly resilient, suggesting a counter-cyclical trend among the research and development community,” the firm said in a recent research report.
The portfolio sale will be the second undertaken by Mars and LaSalle this year after selling a UK mall portfolio, codenamed Project Charlotte, to Edinburgh House and Cerberus for around £250m.