SEGRO, the leading European owner-manager and developer of industrial property, has agreed the sale of IQ Farnborough, a mixed-use business park, for an expected consideration of £90.1 million (approx. 110 million).
IQ Farnborough is the first of SEGRO's six large non-strategic assets to have been sold since being highlighted as non-core at SEGRO's Investor Day in November 2011.
The disposal has been structured in two parts. The existing built assets and 18 acres of development land have been sold to a joint venture between funds advised by Harbert Management Corporation and XLB Property as Asset Manager for £79.7 million.
Additionally, the sale of 11 acres of development land to two future owner-occupiers for £10.4 million has been agreed. These latter sales are principally conditional upon receipt of final planning approval and are expected to be finalized by the end of 2012.
IQ Farnborough currently provides a total lettable space of 411,000 ft² (approx. 38,000 m²). At December 31, 2011, it had a vacancy rate of 13.1% by ERV and a weighted average unexpired lease term of 3.8 years to earliest break.
The combined sale to Harbert/XLB and owner-occupiers reflects a net initial yield of 6.5%, or 7.0% with the benefit of lease incentives/rental guarantees. The total sale proceeds, net of lease incentives/rental guarantees, are approximately 0.8% below the December 31, 2011 book value.
Commenting on the disposal, Phil Redding, SEGRO's Chief Investment Officer, said: "The disposal of IQ Farnborough marks further progress with our strategic objectives, which includes the reshaping of our portfolio to ensure that we hold the highest quality assets in the strongest markets.
"Following our sale of five multi-let industrial estates in February, this announcement takes disposal proceeds announced so far in 2012 to £170 million, with further disposals expected over the balance of the year."