SEGRO offloads six London industrial estates

29th Sep 2011 11:27

Industrial property company SEGRO has sold six industrial estates in Greater London to Legal and General Property for £38.2m.The disposed of portfolio comprises six multi-let freehold industrial estates at various locations across London, including three in Park Royal, northwest London, providing a total lettable space of 43,114 square metres. The portfolio currently has a vacancy rate of 15.4% by estimated retail value and a weighted average unexpired lease term of 2.7 years to earliest expiry. SEGRO said the sale price represents a net initial yield of 6.2% or 8.5% including the benefit of rent top ups and guarantees.David Sleath, SEGRO's Chief Executive, said the disposal is part of the group's strategy to concentrate on larger holdings and higher quality assets in its core markets. "The sale demonstrates that despite uncertain economic conditions, there is still good demand from investors for industrial properties," Sleath claimed.Jonathan Holland, Senior Fund Manager at Legal & General Property, said, "Industrial property in London has seen a stronger recovery than the rest of the UK and, whilst occupier demand across the UK looks set to continue to be weak, London, boosted by international trade and tourism as well as an improving finance and business sector, should support downstream demand for smaller industrial occupiers. As a result of this transaction, the Fund's London weighting increases from 29.7% to 32.3%."--jh