Aberdeen spends £250m in three months

Published 19th Jan 2010

Aberdeen Property Investors has bought £250m of UK commercial property in the last three months with another £500m still to spend.

The fund manager has carried out the deals on behalf of its institutional clients across 15 transactions.

It has been allocated a further £500m more funds to spend on UK property in the next few months and has already identified the first of its next swathe of deals.

Among the recent deals was the purchase of a student accommodation block let to Unite with a nomination from Bournemouth University in Bournemouth for £20.1m.

It bought 141 Bothwell Street office in Glasgow let to BNP Paribas, HSBC, McGregor’s LLP, and PriceWaterhouse Coopers, for £66.5m, and it also bought Parc Pemberton retail park in Llanelli for £30.75m.

Aberdeen said that investor risk aversion had meant that yields on higher risk assets, such as corporate bonds and equities, have “fallen sharply” over the past year – and that it expected the same to happen to higher risk property yields.

The fund manager predicted that competition would mean yields continue to fall in the short-term with projected total returns this year expected to be 16%. Over a five year period it forecast a yearly return of 9.2%.

John O’Connor, managing director of Aberdeen Property Investors UK, said: “The high income return available from UK property relative to other asset classes and overseas property is very attractive.

“While capital values have recovered somewhat we continue to be able to identify long-term total return opportunities located throughout the UK and in all market segments.”

Source: ' PropertyWeek '

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