North East-based property company Adderstone Group have completed the £17m disposal of two of its subsidiaries in one of the region’s largest property transactions of 2013.
UK Ground Rent Estates Ltd and UK Ground Rent Estates (2) Ltd have been sold to an undisclosed purchaser, who is committed to an ongoing management contract.
The Newcastle-based firm said it is still very much on the acquisition trail but that an offer for two of the group’s businesses proved too good to resist.
Adderstone Group Legal Director, Tim Clark, said: “We are still acquisitive in this sector but ground rent investments have become increasingly sought after by some major institutional investment houses.
“Yields have contracted in recent years and we were made an offer for our more mature portfolios that was quite simply too good to refuse.”
The significant deal was overseen by Bond Dickinson’s John Ralph, partner and real estate sector head.
Ralph said: “We are delighted to see a local company successfully compete and demonstrate expertise in a sector dominated by London-based investment houses and more recently some of the big institutional players. We are pleased to have been able to support the growth of the group over the years and long may its success continue.”
The Newcastle-based firm has an extensive land bank of office, leisure and residential ventures with a number of exciting development plans underway across all areas of the business.
These projects include Union Square, a £17m pound student accommodation development which is well underway in Upper Ouseburn. The eight-storey student accommodation development will create a very high specification 228-bed student apartment block which will welcome its first influx of students in September 2014.
Adderstone Group managing director, Paul Tognarelli said: “This deal is significant. It is a hugely impressive achievement to have generated such healthy returns from a property-related investment over the last five years.
“We spotted huge potential in the market and created the ability to develop that potential very effectively.
“We have definitely sensed an upturn in the local economy. Proceeds from this deal will be invested into our development pipeline bringing about further regeneration for the region.”