GFH Financial Group has this morning announced that its UK subsidiary, Roebuck Asset Management, has concluded an off-market sale of a Tesco Distribution Centre in excess of £103 million.
The 540,000ft2 temperature-controlled centre was originally developed by Tesco in 2010. The warehouse serves in excess of 400 supermarkets and convenience stores across the South West of England and South Wales, and forms a crucial part of Tesco’s distribution network.
The sale marks the end of an extremely successful hold period for Roebuck, which acquired the asset for £72 million in October 2017 on behalf of a consortium of institutional Korean investors. The robust income and significant value increase provided the investors with a post-tax internal rate of return (IRR) of more than 16%, well in advance of the target business plan for such a core asset.
The asset was the second acquisition that Roebuck made with South Korean investors and also with Capstone Asset Management. The sale of Tesco Avonmouth follows Roebuck’s 2021 sale of the Accolade Wines, Avonmouth Warehouse for £94 million to Tritax Big Box REIT.
GFH acquired a majority stake in Roebuck, which continues to operate independently, in December 2020 including its investments in these strategic assets. Since GFH’s acquisition, Roebuck has significantly grown in terms of team members and new offices, with more being opened in London and Spain and plans for further office openings over the next 18 months.
With GFH’s backing and support, the intention is to continue to grow assets under management (AUM) and collectively as a group target new acquisitions of circa £384 million over the course of 2022. Roebuck is using its local market expertise and significant track record to establish new investment vehicles in the Core + and Value Add space working with existing and new institutional investors.
“The sale of Tesco Avonmouth has delivered our Korean investors significant out performance following a four and-half-year hold period producing total annual return in excess of 16%,” said Hugh Brown, Managing Partner at Roebuck. “It was fantastic to work with Capstone on another successful investment and the intention is to hopefully find new projects to work on together. Roebuck is actively pursuing opportunities to recycle capital from these sales for either UK and European logistics assets.”