SEGRO has exchanged contracts for the sale of IQ Winnersh for £245.1 million (approx. €284.8 million) in cash to a joint venture between Oaktree Capital Management LP and Patrizia AG.
IQ Winnersh is a 118,200 m² mixed-use suburban office and light industrial business park which has been developed over the past 40 years, predominantly by SEGRO, and is located close to junction 10 of the M4, near Reading. Following the letting of 3,400 m² at the newly refurbished E2 office building, announced in April, it has a vacancy rate of 7.5% and a weighted average unexpired lease term to break of 5.5 years. The sale includes 4 hectares of adjacent development land.
The sale price represents a net initial yield of 5.8%, or 7.4 % including the benefit of rental guarantees and top-ups in relation to lease incentives. The net sale proceeds, after deducting the top-ups, are approximately 12% above the historic December 2012 book value, adjusted for capital expenditure since that date.
Including this transaction, which is expected to complete at the end of July 2013, SEGRO will have completed or announced disposals of £437 million (approx. €507 million) since the start of the year. Proceeds from the sale will initially be applied to reduce net debt.
Commenting, Phil Redding, SEGRO's Chief Investment Officer, said: "We are very pleased to have been able to secure the sale of IQ Winnersh on these terms, achieved through a competitive tender process and reflecting the attributes of the Park. The sale is very much in line with our ongoing focus on recycling capital out of assets at the appropriate time in the cycle in order to crystallize gains from higher value uses and redeploy funds into other profitable growth opportunities in our core markets."
SEGRO has also announced that that it has exchanged contracts for the sale of the Neckermann site in Frankfurt for €46.0 million in cash to a consortium of private investors.
The site is a 309,000 m² bespoke office and distribution facility formerly occupied by Neckermann, the mail order company, which filed for insolvency in July 2012 and fully vacated the site in January 2013. The disposal is the fourth of the six large non-strategic assets identified for disposal as part of SEGRO's strategic review in November 2011.
The sale proceeds are approximately €4.3 million below the December 2012 book value. There are no rental guarantees or lease top-ups associated with the sale.