Segro, a leading provider of flexible business space in Europe, has agreed to sell property assets to the Airport Property Partnership (APP) in the UK for £237 mln (EUR 329 mln).
Segro, a leading provider of flexible business space in Europe, has agreed to sell property assets to the Airport Property Partnership (APP) in the UK for £237 mln (EUR 329 mln).
The sale coincides with the completion by Segro of the acquisition of BAA's 50% interest in APP, the joint venture with Aviva Investors.
The assets being sold to APP include North Feltham Trading Estate, Poyle 14 at Heathrow and the Gatwick International Distribution Centre at Crawley. These assets will enlarge the APP portfolio from £447 mln to £684 mln.
The price of the assets being sold to APP represents a net initial yield of 5.1% and a net equivalent yield of 7.2%: the weighted average remaining lease length is approximately 3.8 years (to break or expiry) and the vacancy rate on the assets being sold is 16.5%.
APP will fund the acquisition through drawing on its committed debt facilities and by approximately £70 mln of new equity from each partner. The transaction is expected to complete before the end of June.
Ian Coull, CEO of SEGRO, said: 'Through these two transactions, Segro has significantly strengthened its Heathrow portfolio, one of our core locations, created the opportunity to apply our management skills across a broader asset base and generated net disposal proceeds for the Group. We are looking forward to working with Aviva Investors and adding value to this combined portfolio.'