Sellers are Luxembourg-registered holding vehicles HBI and HBI Delta Sub, owned by BGP, a former JV between Australian fund managers GPT and Babcock & Brown renamed GPT Halverton, but then relinquished as the Australian firms withdrew when the global crisis hit. The portfolio carries an initial yield of 9.2%, with a current vacancy of 24.4%. It consists of 34 freehold industrial properties acquired from 2005 to 2007. If approved, the acquisition will be partially funded by a $347 million bank facility arranged by UniCredit, secured against target assets. The remaining $93.5million - including swap break costs up to $40 million - will be funded from cash resources. For some time, HBI Holding has been in breach of covenants in its bank facility. A shareholder meeting has been called for 1 April.

"We know this portfolio well; it was acquired during the time we were assembling our German portfolio and the two are highly compatible," said Hansteen joint CEO Ian Watson. "Our management approach will provide an opportunity to create significant added value, particularly by improving occupancy levels." Added counterpart Morgan Jones: "This portfolio has recently suffered significant capital constraints. We believe that a new asset management strategy could add further value. These opportunities, coupled with a new five-year loan on very beneficial terms make this transaction particularly attractive to us."

Hansteen's current German portfolio was valued at end-June at $303 million, with a rent roll of $26.7 million, representing an initial yield of 8.9%, and net occupancy in 2009 of 84%. Earlier this month, the group also took 12% in the insolvent Kenmore European Industrial Fund, without giving price details. In the six months to June, Hansteen posted a 50% rise in profit to $13 million on a portfolio then worth just under $668 million and yielding 8.7%, compared with a 3.3% cost of borrowing. Since then it moved to the main London stock exchange, from AIM, and converted into REIT status.