Morgan Stanley and Thor Equities swoop on UK logistics for €286m

A fund advised by Morgan Stanley Real Estate Investing, acting through a controlled subsidiary in joint venture with Thor Equities Group, has acquired a portfolio of UK big box warehouses for £241 mln (€286m) from UK logistics specialist Segro.

According to Segro, the deal, which is expected to complete by the end of the year, is in line with the properties' June 2019 book value.

The portfolio comprises seven stand-alone big box warehouses with a total floor space of 203,400 m2. The assets being sold as part of the so-called Tudor portfolio are located in Warth Park, Raunds; Dirft, Daventry; Rye Park, Hoddesdon; Hams Hall, Coleshill; Grove Park, Leicester; The Duke, Burton-on-Trent and Magna Park, Lutterworth. Tenants include DHL, DSV, and Clipper Logistics as well as British Gas, Turkish appliance manufacturer Beko, and British supermarket chain, Sainsbury's. 

The combined vacancy rate is 18.5% and unexpired lease term to the earlier of break or expiry is six years. The current passing rent of the portfolio is £10.1 mln.

'The Tudor Portfolio offers a tremendous opportunity for Thor to expand our logistics platform and further establish our presence in Europe,' said chairman of Thor Equities Group, Joe Sitt.

'We are pleased to partner with Morgan Stanley on this strategic acquisition and sustain our growth strategy abroad,' Sitt added.

'The Tudor portfolio acquisition demonstrates our commitment to building a robust global platform. The UK currently presents a good value opportunity, as we look forward to continue growing a portfolio in the South East and Midlands markets with a great partner,' said managing director of European acquisitions, David Hunt-Cuadrado.

'The sale of these assets marks the end of a successful period of ownership by Segro, generating a blended ungeared IRR since acquisition of approximately 11%,' said Phil Redding, chief investment officer of Segro.

'The proceeds will be recycled into our existing and future development programme, including UK big box logistics parks developed using the Roxhill platform which we acquired last year,' Redding concluded.

Earlier in the year, Thor launched a global logistics platform, dubbed ThorLogis, executing a debut European deal near Amsterdam. The move is part of plans to move away from retail real estate, in the face of rising vacancies and falling rents.

'Logistics benefits from the same fundamentals associated with traditional retail, a sector Thor is deeply steeped in,' said Hunt-Cuadrado at the time

'With a pipeline of several assets in strategic logistics hubs across Europe, I look forward to expanding Thor’s presence overseas and creating a bespoke logistics portfolio in the form of ThorLogis,' Hunt-Cuadrado concluded.

CBRE acted for Morgan Stanley and Thor in the deal.

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