STR Capital - Case Studies

“Working with STR over the last few years has been a pleasure; they are professional, commercial, trustworthy, incredibly diligent, going beyond the bounds on their client’s behalf”

Gowlings LLP

Case studies

Since its inception STR has bought and sold assets that have generated an IRR of 18% pa. based on a very conservative gearing strategy. These assets produced a blended geared net initial yield of 9.9% pa secured primarily against government (35.8%) and FTSE 250 or better (40.1%) tenants and a weighted average unexpired lease term (WAULT) of over 10 years.

The Range, Aldershot

The Range, Aldershot

Investment Summary

Date Acquired
January 2016
Description
Retail Warehouse
Tenure
Freehold
Tenant
CDS (Superstores International) Limited
Unexpired lease term
10.6 years
Net Initial Yield
7.0% (9.8% pa pre-tax dividend)
Value Add
Off market sale to special purchaser (post refurbishment)
Sale date
27 months
IRR
27.4% pa
Council Offices, South Lanarkshire

Council Offices, South Lanarkshire

Investment Summary

Date Acquired
April 2017
Description
Grade A office investment
Tenure
Heritable Interest (Scottish equivalent to Freehold)
Tenant
South Lanarkshire Council (sublet to the NHS, Trillium and the Public Library Trust)
Unexpired lease term
9 years
Net Initial Yield
8.25% pa (14.3% pa pre-tax dividend)
Value Add
Lease re-gear (new 20-year term with 2.5% pa compounded uplifts every 5 years)
Hold Period
20 months
IRR
40.4% pa
B&M, Cardigan

B&M, Cardigan

Investment Summary

Date Acquired
April 2018
Description
Retail Warehouse
Tenure
Freehold
Unexpired lease term
9 years at acquisition
Net Initial Yield
6.94% (9.4% pa pre-tax dividend)
Value Add
Off market sale to targeted owner occupier (Lidl)
Sale date
20 months
IRR
19.8% pa
Panther Warehouse, Northampton

Panther Warehouse, Northampton

Investment Summary

Date Acquired
May 2019
Description
Logistics warehouses
Tenure
Freehold
Tenant
Panther Warehousing Limited
Unexpired lease term
9.9 years at acquisition
Net Initial Yield
6.94% (7.2% pa pre-tax dividend)
Value Add
Opportunistic purchase; sold off strong reversionary evidence
Sale date
25 months
IRR
21.5% pa
Council Offices, Worcester County Council

Portfolio example: Council Offices, Worcester County Council

A strategically located office investment near the County Hall and Royal Hospital on a long lease to Worcester County Council (part sublet to the NHS) for a term certain of 17 years with the rent reviewed every 5 years to open market value. Bought for an overseas family office and part of an initial £35m diverse commercial real estate portfolio acquired for the client by STR and actively managed by the team alongside the principal.

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CACI, West Kensington

Portfolio example: CACI, West Kensington

A refurbished warehouse style office let to a strong covenant with 14 years remaining on a full repairing and insuring lease with 5 yearly OMV rent reviews. Acquired for a family Trust for c.£15m.

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Rontec / Costa Coffee, Selby

Portfolio example: Rontec / Costa Coffee, Selby

A newly constructed petrol filling station leased to two excellent tenants for a WAULT of over 15 years with rent reviews every 5 years linked to the Consumer Price Index (CPI) and fixed annual uplifts. Acquired for c.£5.6m as part of a real estate portfolio of £50m+ which STR reprofiled over an 18-month period, extending the average lease duration, introducing indexed linked/fixed uplift rent reviews, and enhancing the overall tenant profile.

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Office, Portland Mews, Soho W1

Portfolio example: Office, Portland Mews, Soho W1

A rare warehouse conversion in the heart of Soho acquired for an owner occupier.

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Coop, Greater London

Portfolio example: Coop, Greater London

A newly constructed convenience store let to the Coop Food Group Ltd for 15 years with 5 yearly rent reviews linked to CPI. Bought and managed on behalf of an established family office who were seeking to extend and improve the quality of their portfolio’s revenue stream.

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The Range, Aldershot

Portfolio example: The Range, Aldershot

A freehold retail warehouse situated in Aldershot, Hampshire leased to CDS (Superstores International) Ltd t/a The Range. With over 10 years left on the lease and with 2.5% pa compounded rental uplifts every 5 years, the property was acquired for £4.35m, 7.0% net initial yield, and subsequently sold 2 years later for £5.55m.

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BMW, Maidenhead

Portfolio example: BMW, Maidenhead

Acquired for an existing client in 2023 to replace a more substantial office investment we sold on their behalf in July 2022. A short walk from Taplow’s Elizabeth Line railway station and fronting the busy A4, the investment is well located and operated by a highly profitable BMW franchisee in occupation on a long lease with over 14 years unexpired and index linked rent reviews.

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Volvo Preston

Portfolio example: Volvo Preston

A newly constructed state of the art car showroom and servicing facility operated by one of the UK’s largest independent car franchises. Leased for a fixed term of 20-years the rent is reviewed every 5 years in line with CPI. This asset forms part of a much larger portfolio entirely owned by a single family office; the properties contained within the portfolio are strategically managed and continually reassessed for suitability by STR.

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Camden

Portfolio example: Camden

Two separate acquisitions off two different landlords completed the purchase of this Central London freehold mixed investment in late 2022. Providing a relatively high combined net initial yield for this popular part of London and with near term rent reviews offering immediate reversionary potential, this asset now forms part of a wider portfolio and was specifically acquired with the next generation in mind.

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Starbucks, Belvedere

Portfolio example: Starbucks, Belvedere

A reversionary investment with a long unexpired lease term to a strong covenant and indexed linked rent reviews. Acquired for a private investor in the summer of 2022 as a long term hold, the investment has strong embedded value in the event that the tenant chooses to vacate when the lease expires in over 13 years’ time.

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Secretary of State, Totton.

Portfolio example: Secretary of State, Totton.

Secure reversionary income for a further 15 years with embedded value in the event the tenant vacates the property at the end of the lease or some time thereafter. Bought for a single family office as part of a larger portfolio.

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Mecca Bingo, Dundee

Portfolio example: Mecca Bingo, Dundee

Acquired for an existing private client. Extended the lease to a rebased affordable rent and exited within 24 months, delivering an IRR of 19% pa.

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Crown Packaging, Newcastle upon Tyne

Portfolio example: Crown Packaging, Newcastle upon Tyne

Newly refurbished and occupied by one of the largest metal food and drink packaging manufacturers in the world, this investment had a long unexpired lease term in a popular and established industrial location, and was acquired for a private client in 2018 as part of his wider portfolio and was sold in 2021 to show an IRR of c.10% per annum.

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