UK REIT Segro has acquired a portfolio of four UK logistics properties from Harbert European Real Estate Fund III, a fund advised by Harbert Management Corporation, for £49.5 mln (€62 mln).

UK REIT Segro has acquired a portfolio of four UK logistics properties from Harbert European Real Estate Fund III, a fund advised by Harbert Management Corporation, for £49.5 mln (€62 mln).

The purchase price, to be funded from existing resources, reflects a net initial yield of 6.3%.

The portfolio is fully let for an average lease length of 6.2 years to the earlier of break or expiry. It comprises four Grade A warehouses totalling 53,100 m2 and a light industrial warehouse in a business park in Norfolk, generating annual net rent of £3.2 mln.

Commenting on the acquisition, Segro's chief investment officer Phil Redding, said: 'This transaction was a great opportunity to acquire four modern UK logistics warehouses in an off-market deal. It meets our strategic objectives of increasing our presence in the UK logistics market through the acquisition of high-quality, income-generating assets that offer the potential for growth.'

H1 earnings
Separately, Segro reported EPRA profit before tax fell by 3.3% to £66.7 mln (84.1 mln) in the first six months of 2014, reflecting a 13% reduction in net rental income primarily due to disposals completed in 2013 and the creation of Segro European Logistics Partnership (SELP).

In Continental Europe, the core portfolio saw a 0.9% increase in value which was offset by a 2.5% decline in the non-core portfolio.

The company carried out £224 mln of acquisitions of modern warehouse assets – at a net initial yield of 7.4% - and land in its core markets.

Development activity accelerated over the period, with seven projects and 28 projects in the committed pipeline, half of which have been pre-let.

‘We have made further progress in re-shaping our portfolio with the balance of our activities moving from net divestment to net investment, as we signalled at the time of our full year results in February,’said Segro CEO David Sleath.