Fidelity’s UK Real Estate Fund has purchased a £22.7m portfolio of modern industrial and office buildings across the Midlands from IM Properties, reflecting a net initial yield of 8.9 per cent.

Comprising 250,000 sq ft of quality accommodation across a mixture of single let and multi let assets, the portfolio is currently let to 13 tenants including Severn Trent, Allied Dunbar Insurance and Staffordshire Police, with a total passing rent of £2.1m.

Around 60 per cent of the income is from industrial assets including 70,000 sq ft at Birch Coppice Industrial Estate in Tamworth, 78,000 sq ft at Cyan Park in Coventry and 42,000 sq ft at the IO Centre in Coventry.

The remaining income is from office accommodation including 18,000 sq ft at Etruria Valley Office Village in Stoke on Trent, 36,000 sq ft at Cross Point Business Park in Coventry and 7,000 sq ft in Stratford upon Avon.

Alison Puhar, portfolio manager for Fidelity’s UK Real Estate Fund commented “These high quality assets provide a high income yield with an average lease length of just under nine years and asset management opportunities in the short term.  The income is backed by good quality tenants and the properties add diversification to the Fund’s rapidly growing UK portfolio.”

GVA Grimley’s Birmingham investment team advised the purchaser. Jones Lang LaSalle’s Birmingham team advised vendor IM Properties.

Damian Lloyd, director for the national markets investment team at GVA Grimley’s Birmingham office, commented: “GVA Grimley was instructed to advise Fidelity on the purchase of a number of buildings across the Midlands. The company was actively seeking a portfolio of property and IM Properties’ mix of quality office and industrial buildings offered the perfect solution with a strong yield across the entire investment.

“Over the last two quarters we have seen a steady growth in portfolio transactions across the Midlands, providing vendors that are restructuring with an opportunity to package up a range of investments in one sale.”

Edward Gamble, Director of the National Investment team at Jones Lang LaSalle’s Birmingham office, added: “The vendor, IM Properties, is continuing with its strategy of exiting from smaller lots and is now looking to recycle cash into large prime institutional assets.”