SEGRO plc and Hermes Property Unit Trust have completed a property swap transaction.
SEGRO has acquired from Hermes a 9,800 sq m single-let, modern distribution warehouse in Hayes, West London for £21.9m. Hermes has purchased from SEGRO two multi-let industrial estates totalling 29,300 sq m, both situated close to Heathrow Airport for £47m. The balance of £25.1m has been paid by Hermes to SEGRO.
The property acquired by SEGRO is located in Hayes, West London, approximately one mile from Junction 3 of the M4 motorway. It is let to Allport Cargo Services until 2026 with a rent review in March 2016. The building was constructed in 2001 and benefits from high specification and low site cover which will allow for future development or extension opportunities. The net initial yield on acquisition is 4.9 per cent and the rental income of the asset is considered reversionary.
The properties acquired by Hermes are Polar Park and the Fairway Trading Estate, both close to Heathrow Airport. The nine units are fully-let and the combined topped up net initial yield is 5.5 per cent, representing a small premium to the book value at 30 June 2015.
SGRO : SEGRO in asset swap with Hermes