SEGRO plc has exchanged contracts to sell its portfolio of offices on the Bath Road in Slough for £325m (€439m) to clients of AEW Europe.
The portfolio comprises approx. 90,329m² of office properties leased to companies spanning blue-chip, national, and international businesses. Planning permission for 234 Bath Road was received in May 2014 and is currently being developed on a speculative basis. SEGRO will continue to manage the development of the building under construction until practical completion.
The sale price represents a net initial yield of 5.6%, a topped-up net initial yield of 6.3% and a small premium to book value at 30 June 2015. The portfolio has a vacancy rate of approx. 5% as at 31 July 2015 and a weighted average lease length of seven years to the earlier of break or expiry.
David Sleath, SEGRO's Chief Executive, said: “The sale of the Bath Road offices is a key part of our strategy to focus on developing, owning and managing modern warehousing and light industrial property in and around major conurbations and at key transportation hubs. With this disposal, over the past four years, we will have disposed of over £2.2 billion of suburban offices and other, non-core, assets and invested over £1.7 billion in the acquisition or development of new assets.
“The Slough Trading Estate remains our largest single industrial and logistics investment. As one of Europe’s most important business parks, it will continue to be a core part of SEGRO’s ongoing strategy and we remain fully committed to continued investment in the remainder of the Estate. We are pleased to welcome AEW as a neighbouring investor.”
