Property investor completes £70m warehouse deal

Property investor SEGRO has completed a £70m acquisition and exchange agreement involving a 390,000 sq ft warehouse unit in the Midlands.

The real estate investment trust (REIT) has acquired the fully-let big box unit in Crick from LGIM Real Assets for £41.3m plus an balancing exchange agreement for Kingsland Business Park – a multi-let industrial estate in Basingstoke.

The warehouse, close to junction 18 of the M1 on the Warwickshire/Northamptonshire border, is let to pet food group, Butcher’s. It is the food company’s only facility in the UK and it has been located in the area since 1976.

The warehouse, which was constructed in two stages between 2010 and 2016, is leased for a further 19 years without break. The acquisition price reflects a net initial yield of 5% and SEGRO said it offered reversionary potential compared to current rental levels for modern warehousing in the area.

Kingsland Business Park comprises 50 buildings totalling 676,300 sq ft and is located two miles from Basingstoke town centre. The estate has an average lease length of approximately three years and a vacancy rate of less than 5%.

The disposal price of £70m is said to reflect a net initial yield of 5.9% and is ahead of the book value set at June 30, 2017.

Phil Redding, Chief Investment Officer of SEGRO, said: “This is SEGRO’s ninth asset swap, enabling us to focus our portfolio on our core areas and asset types, in particular on big box warehouses in the Midlands and urban warehouses in London and the Thames Valley, whilst mitigating the impact of a disposal on income.”

DTRE acted for SEGRO and JLL acted for Legal & General.

Click here to sign up to receive our new South West business news...
Close