Segro seals sale-and-leaseback deal in Germany

UK-listed property REIT Segro has agreed a sale-and-leaseback deal with Mannesmann Plastics Machinery (MPM) for three industrial sites in Germany, at Munich, Nuremberg and Hanover. The leaseback period is for a minimum term of 15 years and the transaction represents a net initial yield of 7.1%. The value of the Munich site is approximately two-thirds of the total portfolio and marks Segro's first move into this target market.

MPM is a leading producer of machines for the plastics and rubber compounding and processing industries. The company was split out of Mannesmann
following its purchase by Vodafone in 2000.

The Munich site comprises 130,649 m² of production/logistics space and 23,488 m² of offices on 24 hectares of land and is made up of a campus of high
quality construction workspace units. The site is located to the northwest of the city within the motorway ring and within easy access of an important S-Bahn train station link.

The sites at Hanover and Nuremberg respectively comprise 28,772 m² of built area on 7.3 hectares of land and 31,669 m² of built area on 5.1 hectares of land. Both sites are in suburban locations and will become part of Segro's portfolio of trading properties.

Commenting on the deal, Segro's group business development director, Walter Hens, said: 'This transaction gives us geographic coverage in three important German cities and increases our total space in Germany to over one million square metres. It continues our strategy of sale-and-leasebacks of sites with long-term development potential, building long-term customer relationships on a pan-European basis.'