SEGRO acquires prime distribution warehouse in property swap
Simultaneous acquisition of 210,000 sq ft prime distribution warehouse in Northampton and sale of two newly developed hotels in London.
SEGRO plc (‘SEGRO’) has acquired a 210,000 sq ft prime, big box distribution warehouse in Northampton in exchange for two recently developed Premier Inn hotels in Uxbridge and Edmonton, in line with its strategy of owning a portfolio of well specified and located modern big box and urban warehouses. The counterparty to the asset swap has asked to remain confidential.
The big box warehouse is fully let to a global third party logistics provider. The warehouse is located in Grange Park in Northampton which is a core logistics area for UK distribution directly next to junction 15 of the M1 motorway. The warehouse was constructed in 2000 and the lease to Yusen Logistics has nine years to expiry. The purchase price of £20.5 million equates to a net initial yield of 5.5 per cent.
The hotels, let to Premier Inn, are in roadside locations at the edge of two recently completed SEGRO developments in Uxbridge and Enfield. The Premier Inn in Uxbridge was completed in December 2015 and is close to junction 1 of the M40 motorway, while the Premier Inn in Edmonton is adjacent to London’s inner ring-road (the A406) and was completed in November 2014. The disposal proceeds for the two assets total £20.5 million, equating to a net initial yield of 4.7 per cent, in line with the valuation at June 2016.
Phil Redding, SEGRO’s Chief Investment Officer, commented:
“The acquisition of a big box warehouse in exchange for two hotels is in line with SEGRO’s strategy of building scale in its UK big box portfolio while also crystallising gains we have generated from the development of higher-value use assets on industrial land.”
SEGRO is a UK Real Estate Investment Trust (REIT), and a leading owner, manager and developer of modern warehouses and light industrial property. It owns or manages over six million square metres of space valued at £7.4 billion serving customers from a wide range of industry sectors. Its properties are located in and around major cities and at key transportation hubs in the UK and in nine other European countries.
For further information see www.SEGRO.com/investors.