Segro buys €503m office portfolio in Slough

UK REIT Segro has acquired a portfolio of offices on the Bath Road, Slough, UK, from clients of AEW for £425 mln (€503 mln).

The portfolio represents 89,000 m2 of built space spread across 39 acres of land with a passing rent of £20 mln, reflecting a net initial yield of 4.6%.
Segro previously developed the office portfolio and sold it as part of its strategy to dispose of non-core assets, with the proceeds reinvested into the group’s development pipeline.

Since January 2016, when the office portfolio was sold, the Slough Trading Estate has delivered capital value growth of 59% and was valued at £2.2 bn as of June 2021.  

Given the ageing nature and relatively short lease terms of some of the offices, Segro plans to transform the assets for the use of data centres, creative industries, life science occupiers and other potential users of industrial space in Slough.

David Sleath, Segro’s Chief Executive, said: ‘Over recent years we have seen a transformation in the nature and level of occupier demand for industrial, data centre and other uses of space in Slough. Since 2016, we have created over 96,000 m2 of new industrial space on the Slough Trading Estate to meet this demand, of which 58,000 m2 has been provided to support our growing data centre customers.’

The acquisition will be funded from cash and bank facilities.


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