SREF and Segro agree €403m industrial swap deal

Schroder UK Real Estate Fund (SREF) and industrial specialist Segro have completed a swap deal involving seven industrial assets across the UK worth a total of £345 mln (€403 mln).

As part of the deal, SREF has sold Matrix Park, an asset which it developed in the early 2000s in Park Royal London, to Segro for £140 mln.

The remainder of the deal comprises a £65 mln capital payment by SREF for the simultaneous purchase of a portfolio of six multi-let industrial and logistics assets located across the UK, worth a collective £205 mln.

Matrix Park includes 256,000 ft2 of multi-let industrial accommodation and a 1.4 acre (5,665 m2) development site. The estate is fully let to seven tenants across 11 units, and the sale reflects a capital value of £546 per ft2.

The industrial portfolio SREF is acquiring from Segro consists of three multi-let industrial estates and one urban logistics unit located in Greater London and two national logistics assets in the West Midlands.

The London assets include X2 in Hatton Cross, 14 Advent Way in Edmonton, and Oakwood Business Park in Park Royal, as well as the DPD distribution facility in Radlett. The Midlands logistics units include the DHL at Hams Hall in Birmingham and the Asda distribution centre at Brackmills in Northampton.

The portfolio comprises a total of 880,000 ft2 and benefits from strong sustainability credentials. Two of the properties (Edmonton and Radlett) benefit from BREEAM ‘Very Good’ ratings, as well as having 100% ‘A’ EPC ratings. Within the portfolio, assets also feature PV panels, rainwater harvesting systems, ground source heat pumps and multiple EV charging points.

On a unit-by-unit basis, 68% of the EPC’s in the portfolio are rated as a score of B. The portfolio purchase price of £205 mln reflects a capital value of £232 per sq ft.

Rob Cosslett, deputy fund manager for SREF, Schroders Capital, said: 'This landmark transaction with Segro is in line with several key strategic targets for SREF including growing the fund’s income returns, increasing exposure to the industrial sector, strengthening future capital performance potential, and improving portfolio sustainability credentials.

'The UK industrial sector continues to thrive due to the acceleration of the shift in consumer behaviours over the last 18 months, which we expect will continue longer term.'

The swap deal is the latest transaction involving the two companies after Segro agreed to purchase SREF’s east London urban logistics park, Electra Business Park in Canning Town, in October 2020 for £133 mln.

Gerald Eve acted for Schroders with Montagu Evans advising Segro.


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