UK industrial REIT Segro and Hermes Property Unit Trust have completed a property swap transaction involving two industrial assets near London.
UK industrial REIT Segro and Hermes Property Unit Trust have completed a property swap transaction involving two industrial assets near London.
Segro has acquired a 9,800 m2, single-let distribution warehouse in Hayes, West London for £21.9 mln (€30 mln) from Hermes. For its part, Hermes has purchased from Segro two multi-let industrial estates totalling 29,300 m2, both situated close to Heathrow Airport for £47 mln, with the balance of £25.1 mln paid in cash.
The property acquired by Segro is let to Allport Cargo Services until 2026 with a rent review in March 2016. The net initial yield on acquisition is 4.9%.
The properties acquired by Hermes are Polar Park and the Fairway Trading Estate. Comprising nine fully let units, the combined topped up net initial yield is 5.5%, representing a small premium to the book value at 30 June 2015.
'This off-market transaction represents Segro's second property swap in three months and has allowed us to acquire a modern, well-specified distribution warehouse let to a strong single occupier on a long lease in an area of West London critically short of modern space,' said Phil Redding, Segro’s CIO.