SEGRO agrees sale of Slough office portfolio for £325 million
SEGRO plc has exchanged contracts to sell its portfolio of offices on the Bath Road in Slough for £325 million to clients of AEW Europe.
The sale price represents a net initial yield of 5.6 per cent, a topped-up net initial yield of 6.3 per cent and a small premium to book value at 30 June 2015. The transaction is expected to complete during January 2016.
The portfolio, which fronts the Slough Trading Estate, contains 972,300 sq ft 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 will continue to manage the development of the building under construction until practical completion.
The proceeds of the sale will be used to reduce the Company’s gearing and to fund SEGRO’s strong development pipeline. The pro forma annualised earnings impact of the disposal for SEGRO will be a reduction of approximately £9.5 million of adjusted, post-tax profit1.
David Sleath, SEGRO's Chief Executive, said:
“The sale of the Bath Road offices is a key part of our strategy to focus on developing, owning and managing modern warehousing and light industrial property in and around major conurbations and at key transportation hubs. With this disposal, over the past four years, we will have disposed of over £2.2 billion of suburban offices and other, non-core, assets and invested over £1.7 billion in the acquisition or development of new assets.
“The Slough Trading Estate remains our largest single industrial and logistics investment. As one of Europe’s most important business parks, it will continue to be a core part of SEGRO’s ongoing strategy and we remain fully committed to continued investment in the remainder of the Estate. We are pleased to welcome AEW as a neighbouring investor.”