SEGRO and Picton complete UK property swap (UK)

SEGRO plc and Picton Property Income Limited have completed a property swap transaction through which SEGRO has acquired from Picton a 38,150 m² single-let, modern distribution warehouse at Magna Park, Lutterworth for £34.0 million (approx. €40.6 million). Picton has purchased from SEGRO a 32,810 m² modern multi-let industrial estate at Parkbury, Radlett for £40.5 million (approx. €48.3). The remaining balance of £6.5 million has been paid by Picton to SEGRO in cash.

The warehouse acquired by SEGRO was completely rebuilt in 2006 and is leased to Primark until October 2026, with a break option in 2016. The net initial yield on the acquired asset is 8.1%, which reflects the potentially short term nature of the income. The net initial yield on the disposal is 6.3%.

SEGRO has acquired this prime, modern building on one of the best distribution parks in the UK. Magna Park, situated within the ‘golden triangle’, is an extremely attractive location for both logistics operators and retailers as it provides them with quick and easy access to Britain's network of motorways including the M1, M69, M6, M40 and M5. Occupiers at Magna Park include Asda Walmart, Britvic, DHL, Eddie Stobart, Geodis and Wincanton, many of which are also customers of SEGRO.

Picton has acquired Parkbury in Radlett, which is adjacent to the M25 and comprises 24 multi-let units totaling 32,810 m² which were constructed by SEGRO between 2003 and 2009.

Phil Redding, SEGRO’s Chief Investment Officer, said: “This is another innovative, off–market property transaction that demonstrates how SEGRO is continuing to reshape its portfolio. This acquisition is in line with our strategy to increase our presence in the UK logistics market by acquiring modern, single-let distribution warehouses in prime locations along major transportation hubs and distribution corridors.”

Source: FTI Consulting

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