A COLLECTION of Scottish industrial assets, known as the Malt Portfolio, has been sold for £27 million in one of the biggest deals of its type seen in Scotland this year.

The property was sold by Galbraith, the commercial property specialist, together with MWM Property Consultants, to Manchester-based David Samuel Properties, and represents a quarter of the volume of the £100m worth of deals concluded this year so far in Scotland.

It attracted interest from the Netherlands and a bid from the US but the portfolio was secured by David Samuel, a firm familiar with large-scale assets.

The agents said it comes at a time when industrial property in Scotland has often offered a better return for investors than south of the Border while the pound makes the UK a better prospect from overseas.

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The portfolio had been built up over the last six years for clients of industrial specialist Cedarwood Asset Management and comprises eight assets including industrial, trade-counter and motor-trade property, covering 409,000 sq ft of accommodation in all.

The assets include three sites near the M8, with one at Bathgate and two in Livingston, Pitreavie Business Park in Dunfermline, Newton Trading Estate, in Ayr, Halbeath Motor and Trade Park, also in Dunfermline, and Broadfold Road, a multi-let industrial facility in Bridge of Don, Aberdeen.

Will Sandwell, partner in the commercial investment team at Galbraith, said: “It’s a sector which has been increasingly active over the last 24 months which is testament to the investor appetite.

“Somebody has come to Scotland with a big cheque book and done a good deal.

“If you look at the UK industrial market as a whole there has been increased activity across the UK."

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He said: "There is a very clear trend in the south that yields have compressed to 4.5% in some instances, and if you bring that market up to Scotland you are arguably investing in the same fundamentals of multi-let industrial property, but you are getting quite a bit more return.

“Some of the statistics behind that are overall industrial vacancy rate in Scotland is down at about 3.5%, the five-year average runs at 6.5%, and also in the last 24 months the rental growth we have seen is about 5% per year on average.

“The statistics are good. Last year, the total Scottish market was about £350m-360m and what we saw in 2018 was the multi-let sector move towards being 50% of that spend, so the trend is continuing.

“This year, in terms of deals concluded, we suspect there is probably about £100m, so this figure represents maybe 25% of the volume.”

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There is around a further £60m worth of property currently under offer in the sector also.

Mr Sandwell said: “There isn’t that many packages like this.

“It allows an investor to take a meaningful position and from our perspective that was the angle to create some liquidity for it, which was packaging up something that somebody wants in a scalable manner.”

There was a direct move by a US buyer, although there was no move from the Netherlands at close.

Mr Sandwell said: “We had overseas bidders, from the US. It is no surprise given the pound looks like relatively good value, but that’s a trend we’ve seen in UK real estate over the last two to three years and a lot of the overseas investors either have good in-house or linked asset management advisors.”

The firm said that the transaction is the final stage of a £33m investment disposal programme, following execution of an asset management plan.

The portfolio had a 4% cent vacancy rate at the point of sale and average unexpired lease term of 4.93 years.

The rent roll is over £2.38m a year, providing a portfolio yield of approximately 8.25%.