SEGRO has announced that it has exchanged contracts to sell its portfolio of offices on the Bath Road, Slough, for £325m to clients of AEW Europe. The portfolio fronts the Slough Trading Estate and contains 972,300 square feet of office properties leased to companies spanning blue-chip, national and international businesses, and one office building currently being developed on a speculative basis. SEGRO say that they will continue to manage the development of the building that is under construction until practical completion.
The company advises that the sale reflects its strategy of focusing on developing, owning and managing modern warehousing and light industrial property in and around major conurbations and at key transportation hubs. Following this sale, the company says that it has, over the past four years, disposed of over £2.2bn of suburban offices and other, non-core, assets and invested over £1.7bn in the acquisition or development of new assets.
The sale price of £325m represents a net initial yield of 5.6%, a topped-up net initial yield of 6.3% and a small premium to book value at 30 June 2015. The transaction is expected to complete during January 2016. SEGRO say that the proceeds of the sale will be used to reduce its borrowings and to fund its development pipeline and the pro forma annualised earnings impact, of the disposal, will be a reduction of approximately £9.5m of adjusted, post-tax profit.
The Slough Trading Estate remains SEGRO’s largest single industrial and logistics investment and SEGRO say this will continue to be a key part of its ongoing strategy and that they are fully committed to continued investment in the remainder of the estate.
SEGRO sells Slough Office portfolio for £325m : SGRO