Lord Edmiston's £1.5B Sheds Pivot

IM Properties is to take a gamble on delivering a £1.5B logistics property pipeline as it abandons offices and retail in the hunt for high-growth medium-term prospects.

Lord Edmiston’s company has offloaded offices and retail assets, seeding a fund to support a 15M SF pipeline of industrial floorspace with a potential capital value of £1.5B.

The firm has accumulated a £320M war chest as it pivots toward logistics property, according to the annual report.

IM scooped £300M from investment sales during 2020, allowing it to repay £125M borrowings and leaving a £175M surplus. It also sold the 448K SF Blythe Valley business park to Singapore-based Frasers Logistics & Commercial Trust as part of a £95M deal, and already has £109M in cash reserves. From this IM Properties repaid a further £58M debt leaving a total of £320M.

The report showed the firm took advantage of the coronavirus pandemic to reduce its retail interests to almost nothing. In late 2019 shopping centres and high street shops accounted for 13% of its portfolio, with retail warehousing at 15%. By the start of 2021 this had fallen to 9% and 7%, respectively, and the proportion in malls and shops was down to 2% by June 2021. It has hung on to its reduced holding in retail warehousing.

At the same time the proportion of the portfolio in the office sector has fallen from 29% to 14%.

The privately owned Solihull-based property business said in its annual report that it is chasing mid-range high-growth options.

The report showed an investment portfolio valued at £792M in December 2020, net assets of £438M, and recorded profits down from £22.9M to £19.8M.