Castlemore Starts to Build Investment Portfolio

LONDON-Midlands-based developer and investor Castlemore Securities has bought a mixed-use portfolio from REIT Asset Management for £39 million ($62 million). The deal is part of a new strategy at Castlemore to build an investment portfolio to complement its strong presence in the development sector.

The portfolio–known as The Rangers Portfolio–comprises 18 properties totalling 550,000 sf throughout England and Wales. The average unexpired lease length is 12 years, and the current annual income of £3.1 million ($5 million) per annum shows an initial yield of 7.5% with reversionary potential.

The acquisition follows Castlemore’s recruitment of Mike Riley from Quintain Estates & Development and Nick Gregory from UBS Global Asset Management to build a £750 million investment portfolio within the next three years.

Castlemore Chairman Grahame Whateley said: “This portfolio typifies the sort of investment acquisition we are seeking to make, as it brings properties with long leases and a good income flow into our ownership.”

Castlemore was advised by Franc Warwick and financing was provided by Bear Stearns.