Segro to acquire Italian logistics developer for €40m

Listed logistics specialist Segro has exchanged contracts to acquire 90% of Vailog Srl, a major logistics developer in northern Italy, from the majority shareholder FBH Spa for €39.6 mln.

Segro said the transaction will allow it 'to establish an immediate strategic presence in the Northern Italian big box logistics market with opportunities to grow additional scale through development'.

'Northern Italy is one of the major Continental European logistics markets, benefiting from a strong manufacturing heritage and an affluent population,' commented David Sleath, Segro’s chief executive officer. 'Segro has been active in the region for some time but the acquisition of Vailog provides an immediate logistics platform there.'

Vailog is one of Italy’s largest logistics real estate development companies and is led by co-founder and managing director Eric Véron, who owns the remaining 10%. Since it was founded in 2003, Vailog has developed over 1.5 million m2 of logistics space in Italy, France and the Netherlands, working with investors including Deka Immobilien, AEW and Hines.

The Vailog portfolio contains property assets valued at €104.8 mln comprising €39 mln of completed assets (45,400 m2 of logistics space in Bologna, Milan and Paris valued on a 7.1% EPRA net initial yield); €24.3 mln of pre-let warehouse under construction; as well as a land bank of €25.3 mln located mainly around Milan and other major logistics markets in northern Italy. Finally, the company has options to acquire a further 80-hectare land bank valued at €1.8 mln and photovoltaic plant (PV) assets valued at €14.4 mln.

At 31 March 2015, Vailog’s enterprise value was €99.2 mln and its net asset value was €44 mln. Vailog is partly financed with €54 mln of net debt as of 31 March 2015

Segro estimates the transaction should allow it to build a presence in Italy of 500,000 m2 of assets under management within the next five years. The standing assets acquired will likely be offered to the Segro European Logistics Partnership (SELP) joint venture in due course, as will newly-completed developments, the company added. Segro has an option to acquire the remaining 10% of Vailog within the next three to five years.

Completion of the deal is expected by the end of June 2015.