Slough Estates in £109 million disposal (UK)

Slough Estates International ("SEI") announces it has completed the disposal of three properties: the Deva Retail Centre, Chester, an estate in South Ruislip, and a development at Kingswood, Ascot; for a total of approximately €150 million (£109.2 million). The disposals are the latest actions carried out as part of SEI's capital recycling strategy.

SEI has sold the Deva Retail Centre, Chester together with a retail warehouse and industrial premises at South Ruislip, in a combined transaction to CMG/Insight for approximately €100 million (£73.5 million). CMG/Insight already owned neighbouring property. Together, these two assets total 18,437 m² and the disposals represent an attractive overall initial yield of 4.22% (4.42% on Chester and 3.75% on Ruislip) and were sold at approximately €4 million (£3 million) above the book value as at 31 December 2005. The passing rent totalled approximately €4.5 million (£3.3 million), with a vacant 945 m² building at the Chester site.

SEI has also sold Kingswood Ascot to UKCP (Four) Ltd for approximately €49 million (£35.7 million). Located on the outskirts of Ascot and fronting the A332, Kingswood is a low-density office development consisting of three Civic Trust Award winning buildings, designed by Norman Foster. It is currently rented to Agere Systems Ltd at £2.6m per annum. This sale of the 9,350 m² estate reflects an initial yield of 6.8% reflecting the short term nature of the income stream (current occupant's lease expires in 2013), the disposal price was closely in line with book value.

John Heawood, Executive Director responsible for the UK Portfolio, said: "These transactions continue our active acquisition and disposal programme, as we recycle mature assets when there is a good opportunity to realise value created. It also reflects the on-going strategic realignment of SEI's property portfolio, moving away from out-of-town office facilities and discrete retail warehousing facilities and building on our position as Europe's leading providers of flexible business space. These disposals follow further recent examples of the implementation of this strategy - with the purchase of the Treforest Industrial Estate, Cardiff and the sale of properties at Centennial Park, Elstree and Cambridge Research Park, Cambridge."

Source: Maitland

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