SEGRO, Europe's leading owner-manager and developer of industrial property, announces that it has exchanged conditional contracts for the sale of four non-core industrial estates for £204.5 million (approx. 253 million) to a fund advised by Harbert Management Corporation (Europe) LLC.
The portfolio being disposed of comprises four multi-let industrial estates: Heywood Distribution Park in Rochdale, Trafford Park in Manchester and Kings Norton Business Centre and Meteor Park in Birmingham. SEGRO's two regional offices in Manchester and Birmingham will be closed as a result of this disposal.
The four estates comprise approximately 440,000 m² of lettable space. At March 31, 2012, the portfolio had a vacancy rate of 20.5% by ERV and a weighted average unexpired lease term of 4.3 years to earliest break.
The sale price represents a net initial yield of 6.7%, or 7.4% with the benefit of lease incentive top-ups. The sale proceeds, net of lease incentive top-ups, are approximately 2.9% below the December 31, 2011 book value.
Completion is contingent upon finalization of the purchaser's bank funding arrangements, which have been credit committee approved by the purchaser's lenders.
Commenting on this disposal Phil Redding, SEGRO's Chief Investment Officer, said: "In the year to date, assuming the completion of this transaction, we have announced non-core asset disposals of £377 million, with further disposals expected during the remainder of the year. This latest announcement is another important step forward in the process of re-shaping our portfolio to focus on core markets."