SLOUGH (dpa-AFX) - Segro Plc (SGRO.L), a developer of industrial property, on Monday said it has exchanged conditional contracts for the sale of four non-core industrial estates for 204.5 million pounds to a fund advised by Harbert Management Corp. (Europe) LLC.
The portfolio being disposed of comprises four multi-let industrial estates: Heywood Distribution Park in Rochdale, Trafford Park in Manchester and Kings Norton Business Centre and Meteor Park in Birmingham. The disposal will lead to the closure of Segro's two regional offices in Manchester and Birmingham.
The four estates comprise 440,000 sq m of lettable space. At March 31, the portfolio had a vacancy rate of 20.5 per cent by ERV and a weighted average unexpired lease term of 4.3 years to earliest break. The sale price represents a net initial yield of 6.7 per cent, or 7.4 per cent with the benefit of lease incentive top-ups.
The sale proceeds, net of lease incentive top-ups, are around 2.9 percent below the December 31, 2011 book value.
Completion of the deal is contingent upon finalization of the purchaser's bank funding arrangements, which have been credit committee approved by the buyer's lenders.
Phil Redding, Segro's Chief Investment Officer, said: 'In the year to date, assuming the completion of this transaction, we have announced non-core asset disposals of £377 million, with further disposals expected during the remainder of the year. This latest announcement is another important step forward in the process of re-shaping our portfolio to focus on core markets.'
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