UK logistics REIT Segro has acquired Perivale Park, a 34 acre (14 ha) urban warehouse estate in Perivale, West London, from global investment manager Federated Hermes for £202.5 mln (€228 mln).
The estate comprises 55,100 m2 of lettable space across 23 units and 8 acres of land, currently leased as a vehicle compound.
Segro said that the estate was located in its core west London cluster alongside the A40 main road into Central London and within two miles of London’s inner arterial road, the North Circular Road.
Alan Holland, business unit director for Segro’s Greater London portfolio commented: 'Perivale Park is a perfect fit for Segro, sitting adjacent to the A40 and nestled between our core holdings in Greenford and Park Royal.
'It offers a rare opportunity to build further scale and drive value in an area where we already have considerable expertise and knowledge of the local market and customer base. It also offers medium-term development and redevelopment potential in one of London’s prime, and most supply-constrained, industrial clusters.'
Chris Taylor, head of private markets, international at Federated Hermes, said: 'Since purchasing the scheme, we have carried out extensive improvement works at Perivale Park to deliver modern industrial and warehouse units that have shaped the thriving scheme.'
The asset is currently fully let with a weighted average unexpired lease term of 3.4 years to break and 5.5 years to expiry. It generates a topped-up passing rent of £6.8 mln. Reflecting these low current rental levels, the topped-up net initial yield - excluding the land - upon acquisition is 3.5% and the equivalent yield is 4.3%.
'Overall, this is decent acquisition of an under-rented portfolio for Segro,' commented Colm Lauder of UK property analyst Goodbody.
'Portfolios of this scale are in very high demand and tend not to come to market often in London, one of Segro’s key growth regions. Segro has local knowledge of the tenant base, with the site located between Greenford and Park Royal, worth a combined £1.5 bn to Segro which should further help with executing the asset management potential at Perivale,' Lauder added.
Segro was advised by Altus Property Services. ACRE Capital Real Estate acted on behalf of Federated Hermes.
