Menzies Distribution has completed the sale and leaseback of eight distribution depots across its UK logistics network generating £24.65 million.
The proceeds of the sale will support the company’s ambitions to grow the business exponentially following its sale from John Menzies in September 2018.
Chief executive Greg Michael said: “Since our acquisition by private equity firm Endless LLP in September 2018, the company has invested heavily into the retail logistics and parcel delivery markets.
“In July 2019 the company opened its new 170,000 sq ft super-hub in Coventry which, together with its existing 55 depots, has given Menzies Distribution a market leading national footprint, covering from the highlands of Scotland through to its 100 strong electric vehicle fleet in central London.”
Paul McCourt, chief financial officer of Menzies Distribution, said: “In January 2019, we announced a new 5-year Revolving Cash Facility with RBS amounting to £25m which has yet to be utilised. With the continued profitability of the company since, and the generation of a further £25m in cash proceeds from this latest property transaction, the company has built a strong balance sheet to support our continued growth ambitions both organically and through acquisition.”
The eight properties, sold to UK real estate investment trust Custodian REIT, are located in local industrial areas in Aberdeen, Edinburgh, Glasgow, Ipswich, Norwich, Stockton on Tees, Swansea and Weybridge and has a passing rent of £1.61 million. All the properties are let on new 10 year leases with only one unit having a second-year break option.
The sale and leaseback of the eight distribution depots will align these properties with the company’s remaining 47 leased properties across the UK and Republic of Ireland providing a consistent and flexible network of operating bases supporting the long-term growth and diversification of the company.