Centrus arranges £30m institutional financing for Clipstone Industrial REIT plc to acquire new industrial properties
Clipstone is a specialist industrial property fund manager founded in 2008. It manages real estate funds, as well as operating segregated account mandates for larger investors. It currently has over £450m of assets under management. Whilst there are a number of specialist industrial funds in the UK, Clipstone Industrial REIT plc (“the REIT”) is the only pure London and South East focused industrial fund. As at 31 March 2021 the REIT owned 41 industrial properties with a gross asset value of £253.3m and it is the fifth best performing fund in the MSCI UK Quarterly Property Index since it was incorporated into that Index in Q1 2019.
Given the scale of the business and its ambitions for further growth, the REIT’s board decided that it would be prudent to diversify its sources of debt finance and put in place some longer term, fixed rate funding provided by an institutional investor. Centrus was appointed by Clipstone to arrange the finance which involved drafting an information memorandum, meeting with selected institutions and selecting the one that offered the best combination of terms, flexibility and cost. Having considered different amounts and maturities, a new £30m 7-year fixed rate financing was completed with Clipstone drawing down approximately £18m to finance the purchase of a new industrial estate in Chelmsford. While the cost of finance has been fixed for the full £30m, Clipstone has the flexibility of being able to draw down further tranches over the next nine months allowing time to identify and acquire new properties with the certainty of having low-cost finance available at short notice.
The ability to secure committed funding has enabled Clipstone to lock in current market rates and allows its board and management team to continue with their acquisition growth strategy. The funding also represents a diversification of Clipstone’s source of debt finance and the creation of a new strategic relationship with a large and highly respected institutional investor.
Toby Dean, Chief Executive Officer – Clipstone Investment Management Limited I am delighted to have secured term finance at a very attractive fixed rate and on very flexible terms. The first tranche we have drawn down from the £30m financing has allowed us to purchase a new industrial estate in Chelmsford and the remainder of the facility provides financial firepower for further acquisitions as and when we identify suitable new investment opportunities.
Throughout the process Centrus has provided us with first class advice and support. Tapping into Centrus’s wide range of institutional investors we had a number of attractive offers to choose from. With advice from Centrus we selected an investor which offered an attractive combination of price, maturity and flexibility and with whom we can establish our own bilateral relationship for the long term as our business continues to expand.
Robert St John, Centrus Clipstone’s history and performance is impressive and its proposition is compelling. The company has a small, very professional management team which operates decisively and with great integrity. It was a pleasure working with them on this financing.