23-Jun-2010 9:30 AM

SEGRO completes acquisition of 50% stake in Airport Property Partnership

Direct News Source

22-Jun-2010 SEGRO plc, Europe's leading provider of flexible business space, announces that it will, today, complete the acquisition of BAA's 50% interest in the Airport Property Partnership ("APP"), the joint venture with Aviva Investors.

Terms of the deal are as previously announced on 27th April, and are summarised below.

SEGRO also announces it has agreed with APP and Aviva Investors to sell assets from SEGRO's existing portfolio into APP for a cash consideration of GBP237 million. The assets being sold to APP include North Feltham Trading Estate, Poyle 14 at Heathrow and the Gatwick International Distribution Centre at Crawley. These assets will enlarge the APP portfolio from GBP447 million to GBP684 million. The price of the assets being sold to APP represents a net initial yield of 5.1% and a net equivalent yield of 7.2%: the weighted average remaining lease length is approximately 3.8 years (to break or expiry) and the vacancy rate on the assets being sold is 16.5%.

APP will fund the acquisition through drawing on its committed debt facilities and by approximately GBP70 million of new equity from each partner. The transaction is expected to complete before the end of June.

Commenting on the announcement, Ian Coull, Chief Executive of SEGRO said: "Through these two transactions, SEGRO has significantly strengthened its Heathrow portfolio, one of our core locations, created the opportunity to apply our management skills across a broader asset base and generated net disposal proceeds for the Group. We are looking forward to working with Aviva Investors and adding value to this combined portfolio."