UK - The Universities Superannuation Scheme (USS) has continued to build its exposure to the UK industrial sector with the purchase of the Great Western Industrial Park in Southall, West London for £110.4m (€124m).

USS, the second-largest private pension scheme in the UK, acquired the asset from investment company and property developer Segro, representing a net initial yield of 6.9%, which rises to over 7% once outstanding reviews are settled.

Great Western Industrial Park covers 773,379 square feet and comprises 27 production and warehouse units, let to tenants such as food and beverage companies Noon Products and Delifrance.

The weighted average lease length for the estate is 10.2 years to earliest termination.

This latest deal follows a number of acquisitions by USS, including Prologis Park, Marsh Mills Retail Park, Great Cambridge Retail Park and the Equiton Industrial Portfolio, as well as a number of disposals from the latter.

Graham Burnett, head of property at USS, said the fund has now invested in excess of £450m into UK property so far in 2009, and will "continue to actively pursue other opportunities of similar quality".

As part of this sale, Segro has pre-sold a future development of 36,575 square feet at Western Point which forms part of the industrial park.

The company has entered into an agreement with GeoPost UK to develop a cross docking warehouse on a 20-year lease at an annual rent of £621,775.

Great Western Industrial Park was part of the portfolio of assets owned by property company Brixton before it was taken over by Segro.

Segro claimed the sale price represents a 34% increase "over the implied valuation at the time of the offer to acquire Brixton".

Ian Coull, chief executive at Segro, 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."