Gramercy Says Ta-Ta to Two UK Assets
- Dec 30, 2016
Coventry, England—Prior to closing its $5.7 billion all-stock merger with Chambers Street Properties in December 2015, Gramercy Property Trust said it would shed non-core assets post-unification, and the REIT continues to do just that. Gramercy recently completed the sale of two of its four remaining properties in the U.K.—a single-tenant office building and an interest in a single-tenant logistics facility—for a combined £21 million, or roughly $25.8 million.
Gramercy isn’t suffering from year-end malaise. News of the dispositions in the U.K. follow the announcement of the REIT’s $521 million purchase of a 10.3 million-square-foot U.S. warehouse portfolio by only two weeks. “We are well ahead of our plan in terms of driving towards the single-tenant industrial company with assets located in major markets in the United States,” Gordon DuGan, CEO of Gramercy Property Trust, said during the REIT’s third quarter earnings call, November 2. At the time of the call, agreements were already in place for the disposition of the two recently sold assets in England.
The U.K. office property, located in Coventry, is home to a multinational utility company, courtesy of a lease transaction Gramercy executed in advance of the £9 million sale of the building. Fetching £12 million, the industrial facility is located in Rugby, and occupied by a global logistics provider that just renewed its commitment to the space. The building had been part of Gramercy’s joint venture industrial portfolio with Goodman Holdings Jersey Trust, in which the REIT owns an 80 percent stake. There are now two assets remaining in the Goodman UK JV, both of which are on the market.
The Coventry and Rugby transactions increase Gramercy’s total sales of non-core assets in the United States and Europe to more than $1.5 billion. The company hasn’t neglected the acquisitions side either. In addition to the aforementioned portfolio purchase, earlier this quarter Gramercy grabbed a 2.5 million-square-foot national collection of industrial properties for a quarter-billion dollars.
“As we move into 2017, we’ve had a complex company with a lot of moving pieces. We think ‘17 is the year where we’ll see the benefit of reduced complicity, fewer moving pieces,” DuGan said.