A 50-50 joint venture of industrial REIT Segro and private equity fund manager Moorfield has acquired the UK Logistics Fund (UKLF) for £315 mln (EUR 375 mln) from Hermes Real Estate Investment Management, Legal & General and LaSalle Investment Management. The purchase price represents a net initial yield of 6.3%.
A 50-50 joint venture of industrial REIT Segro and private equity fund manager Moorfield has acquired the UK Logistics Fund (UKLF) for £315 mln (EUR 375 mln) from Hermes Real Estate Investment Management, Legal & General and LaSalle Investment Management. The purchase price represents a net initial yield of 6.3%.
Segro will become the property manager of the UKLF portfolio, which comprises 14 prime logistic warehouse units plus one development site in 12 locations across the UK. The portfolio has a total lettable floor space of 404,100 m2 with 64% of the space by value located in the South of England.
Current occupiers include Tesco, Sainsbury's, GKN Aerospace, Royal Mail, Booker and Exel UK. The UKLF portfolio currently has a weighted average lease length to expiry of 13.3 years and a vacancy rate of 16% by rental value. In 2011, the portfolio will show a net income of around £18 mln per annum and, at acquisition, the contracted rent is £21 mln per annum.
To finance the acquisition (including transaction costs), both Segro and Moorfield will contribute around £65 mln of equity each to the partnership. In addition, the joint venture has agreed a five-year bank facility of up to £189 mln with Metropolitan Life Insurance Company and DekaBank secured on the UKLF assets. Laxfield Capital acted as arranger to Metropolitan Life Insurance Company.
The deal is currently expected to complete by the end of January 2012.
