Segro has purchased eight fully-let prime French logistics assets for 160.8 million euros (£125 million) from Foncière Europe Logistique.
The acquisition, following on from the purchase earlier in the year of a 50 per cent stake in the UK Logistics Fund, is part of Segro’s strategy – announced in November 2011 – to develop its logistics platform across key transportation corridors in the UK and Continental Europe.
The estates include 13 buildings, totalling approximately 2,755,800 sq ft of rental space in The Ile de France region, and Lyon. They represent about 14.2 million euros (£89 million) of rental income each year.
Chief Investment Officer, Phil Redding, said: “This transaction provides us with a rare opportunity to acquire some of the best logistics assets in the two strongest markets in France. The assets deliver an attractive income yield from strong covenants and will allow us to drive operational efficiencies from greater critical mass with the potential to add value over time.”
The purchase is expected to be finalised in September 2012.
The acquisition, which is expected to complete in September 2012, will be funded using part of the proceeds from the £377 million of non-core asset disposals. These proceeds have also been used to pay down debt, consistent with the Group’s objective to reduce leverage over the medium term.