SEGRO sells industrial estates for £204.5m
Segro has exchanged conditional contracts for the sale of four industrial estates for £204.5m as it continues to reshape its portfolio to focus on core markets. The multi-let industrial estates are to be acquired by a fund advised by Harbert Management Corporation. The sale depends on the finalisation of the buyer’s bank funding arrangements, which have been approved by its lenders.
The industrial estates being sold are Heywood Distribution Park in Rochdale, Trafford Park in Manchester, and Kings Norton Business Centre and Meteor Park in Birmingham. They comprise about 440,000 sq m of lettable industrial space in total. The portoio had a vacancy rate of 20.5% by ERV at the end of March this year, and a weighted average unexpired lease term of 4.3 years to earliest break. “The sale price represents a net initial yield of 6.7%, or 7.4% with the benefit of lease incentive top-ups. The sale proceeds, net of lease incentive top-ups, are approximately 2.9% below the 31 December 2011 book value,” Segro said.
Segro, which will close its two regional offices in Manchester and Birmingham as a result of this disposal, said the sale would take the total of non-core asset disposals to £377m for the year to date. Chief investment officer Phil Redding said the company expected to make further disposals during the rest of the year.