Segro announced on Friday that it has sold the Great Western Industrial Park in Southall, West London to the Universities Superannuation Scheme (USS) for £110.4 mln (EUR 123 mln). The investment volume reflects a net initial yield of 6.9%, which rises to over 7% once outstanding reviews are settled.

Segro announced on Friday that it has sold the Great Western Industrial Park in Southall, West London to the Universities Superannuation Scheme (USS) for £110.4 mln (EUR 123 mln). The investment volume reflects a net initial yield of 6.9%, which rises to over 7% once outstanding reviews are settled.

Great Western Industrial Park covers 72,000 m2 and comprises 27 production and warehouse units. The tenants include food and beverage companies Noon Products Ltd and Delifrance (UK). The weighted average lease length for the sale of the estate is 10.2 years to earliest termination.

Segro said it pre-sold a future development of 3,344 m2 at Western Point which forms part of the industrial park as part of the deal. Segro has entered into an agreement with GeoPost UK to develop a cross docking warehouse on a 20-year lease at an annual rent of £621,800.

The sale price of Great Western Industrial Park represents a 10% premium over the book value at June 2009 after allowing for the capital expenditure to be incurred in connection with the GeoPost pre-let, and also a 34% increase over the implied valuation at the time of the offer to acquire Brixton.

Commenting on these disposals, Ian Coull, Segro's CEO said, 'When we bought the Brixton portfolio, we knew there would be opportunities for us to pursue our strategy of pro-actively recycling assets. This sale confirms the attractive price at which we acquired the whole of the Brixton portfolio.

'The Brixton portfolio has been successfully integrated within Segro's UK business and despite the challenging markets we are currently facing we believe that a number of further positive opportunities will emerge from the combination of such high quality and well located UK industrial portfolios.'

USS is the second largest private pension scheme in the UK with property assets totalling approx £1.8 bn. Recent deals have included Prologis Park, Bromley by Bow (£48 mln), Marsh Mills Retail Park, Plymouth (£27.5 mln), Great Cambridge Retail Park, Enfield (£38 mln) and the Equiton Industrial Portfolio (£196 mln).

King Sturge advised USS and Savills acted for Segro.