Orchard Street Investment Management has bought a portfolio of UK industrial assets for £113.8m (€143.3m) from Segro.
The investment manager has bought six industrial estates in the UK’s south east at a 6.1% initial yield on behalf of St James’s Place.
The ‘Orbital’ portfolio includes 97 individual units totalling 1m sqft.
Orchard Street said the portfolio was 91% let to 71 tenants.
Barney Rowe, partner at Orchard Street, said the portfolio was a “rare opportunity” to gain a substantial foothold in the south east UK region’s industrial market.
“The strong level of tenant demand for these properties offers exciting prospects for future income growth throughout the portfolio,” Rowe said.
Separately, Segro said its sale came at a 10% premium to June book value.
The portfolio generates £6.4m in passing rent, which rises to £7.4m on expiry of rent-free periods.
Phil Redding, SEGRO CIO, said the disposal was an “important milestone” as it reshapes its portfolio and leaves the UK non-core asset disposal programme “virtually complete”.
“The proceeds of this transaction will be used to reduce our net debt in the short term and help fund our accretive UK and Continental European development pipeline,” Redding said.
The listed property company sold seven regional German industrial estates – in addition to exchanging contracts to sell three other properties – to Hansteen Holdings.
The remaining three assets, worth €5m, will be sold by the end of the first quarter of next year.