SLOUGH (dpa-AFX) - SEGRO (SGRO.L) reported exchanging contracts for the sale of IQ Winnersh for 245.1 million pounds cash to a joint venture between Oaktree Capital Management LP and Patrizia AG.
IQ Winnersh, a 118,200 sq m mixed use suburban office and light industrial business park which has been developed over the past 40 years, predominantly by SEGRO, is located next to junction 10 of the M4, near Reading. Upon the letting of 3,400 sq m at the newly refurbished E2 office building, announced in April, it has a vacancy rate of 7.5 percent and a weighted average unexpired lease term to break of 5.5 years. The disposal includes 4 hectares of adjacent development land.
The sale price represents a net initial yield of 5.8 percent, or 7.4 percent comprising the benefit of rental guarantees and top-ups regarding lease incentives. After deducting the top-ups, the net sale proceeds amount to nearly 12 percent above the historic December 2012 book value, adjusted for capital expenditure since that date. Including this transaction, which may close at the end of July 2013, SEGRO would have completed or announced disposals of 4371 million pounds since the beginning of the year. The sale proceeds would be initially applied to reduce net debt.
In a separate press release, SEGRO said it has exchanged contracts for the Neckermann site sale in Frankfurt for 46.0 million euros, or 39.71 million pounds in cash to a consortium of private investors. The site is a 309,000 sq m bespoke office and distribution facility formerly occupied by Neckermann, the mail order company, which filed for insolvency in July 2012 and fully vacated the site in January 2013.
The transaction proceeds are nearly 4.3 million euros, or 3.71 million pounds below the December 2012 book value, with no rental guarantees or lease top-ups associated with the sale.
In spite of re-letting about 25 percent of the site since January 2013 and thereby being on target to break-even for the full year, SEGRO incurred an operating loss at the site of roughly 1.0 million euros, or 0.91 million pounds in the six months to June 30, 2013, because of the impact of vacant property costs. The sale completion is expected in the fourth quarter of 2013.
Copyright RTT News/dpa-AFX