Segro buys logistics business

Industrial property company Segro said it is to buy 14 warehouse units and a one development site.

Segro and its joint venture partner Moorfield Real Estate Fund UK Logistics Fund are splashing out £314.7m on UK Logistics Fund (UKLF), which owns the sites.

Both partners will pay £65m into the their joint venture, UK Logistics (Jersey) Limited Partnership, to finance the acquisition.

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UKLF is currently owned by Hermes Real Estate Investment Management Limited, Legal & General and LaSalle Investment Management.

Segro said the warehouses were on or near main arterial roads in established distribution areas across the UK.

The portfolio has a total lettable floor space of 404,100 sq m (4.35m sq ft) with 64% of the space by value located in the South of England, the company said.

Current occupiers include Tesco, Sainsbury's, GKN Aerospace, Royal Mail, Booker and Exel UK.

The UKLF portfolio currently has a weighted average lease length to expiry of 13.3 years and a vacancy rate of 16% by rental value, Segro said.

In 2011, the portfolio will show a net income of around £18m per annum and, at acquisition, the contracted rent is approximately £21m per annum, it added.

"The portfolio offers both a high quality current income stream and the potential to add further value through active asset management," said Segro chief executive David Sleath.