SEGRO announces the sale of IQ Winnersh for £245 million

SEGRO announces the sale of the Neckermann site for €46 million

SEGRO is pleased to announce that it has exchanged contracts for the sale of  “IQ Winnersh” for £245.1 million in cash to a joint venture between Oaktree Capital Management LP and Patrizia AG. IQ Winnersh is 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, and is located close to junction 10 of the M4, near Reading. Following 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 per cent and a weighted average unexpired lease term to break of 5.5 years. The sale includes 4 hectares of adjacent development land. The sale price represents a net initial yield of 5.8 per cent, or 7.4 per cent including the benefit of rental guarantees and top-ups in relation to lease incentives. The net sale proceeds, after deducting the top-ups, are approximately 12 per cent above the historic December 2012 book value, adjusted for capital expenditure since that date. Including this transaction, which is expected to complete at the end of July 2013, SEGRO will have completed or announced disposals of £437¹ million since the start of the year. Proceeds from the sale will initially be applied to reduce net debt.  Commenting, Phil Redding, SEGRO’s Chief Investment Officer, said:  “We are very pleased to have been able to secure the sale of IQ Winnersh on these terms, achieved through a competitive tender process and reflecting the attributes of the Park. The sale is very much in line with our ongoing focus on recycling capital out of assets at the appropriate time in the cycle in order to crystallise gains from higher value uses and redeploy funds into other profitable growth opportunities in our core markets.”
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SEGRO is pleased to announce that it has exchanged contracts for the sale of the “Neckermann site” in Frankfurt for €46.0 million (£39.7¹ million) 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 disposal is the fourth of the six large non-strategic assets identified for disposal as part of SEGRO’s strategic review in November 2011. The sale proceeds are approximately €4.3 million (£3.7¹ million) below the December 2012 book value. There are no rental guarantees or lease top-ups associated with the sale. Despite successfully re-letting approximately 25 per cent 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 approximately €1.0 million  (£0.9¹ million) in the six months to 30 June 2013 due to the impact of vacant property costs. Commenting on the disposal, Phil Redding, SEGRO’s Chief Investment Officer, said: “The disposal of the Neckermann site, one of our three remaining large non-strategic assets, is an important step forward for us. Given the large and bespoke nature of this asset, the age of the buildings and planning constraints on the site, we are pleased to be able to move on so quickly after Neckermann’s exit.  Our local team will now be able to devote their energies in Germany to developing our core business.” Completion of the disposal is expected in the fourth quarter of 2013, subject to the usual pre-emption rights afforded to the local authority.
 
Source : Company