LGIM Real Assets (“Legal & General”) and SEGRO plc (“SEGRO”) have completed a property swap transaction in which SEGRO has acquired Legal & General’s single let warehouse at G Park, Crick, and Legal & General has acquired SEGRO’s Kingsland Business Park multi-let industrial estate in Basingstoke.
1 Nov 2017
The warehouse acquired by SEGRO is located in Crick, a prime location close to junction 18 of the M1 motorway. The unit is 390,000 sq ft and is let to Butcher’s Pet Care Limited for a further 19 years without break. Butcher’s Pet Care is one of the UK’s leading producers of pet food and this facility is the company’s only UK presence. Butcher’s Pet Care has been located in Crick since 1976. The warehouse was constructed in 2010 and subsequently extended in 2016 to accommodate the tenant’s expansion. The transaction price of £41.3 million reflects a net initial yield of 5.0 per cent and offers reversionary potential compared to current rental levels for modern warehousing in the area. As part of the transaction, SEGRO will also receive a balancing cash payment.
Kingsland Business Park comprises 50 buildings totalling 676,300 sq ft and is located two miles from Basingstoke town centre and three miles from the M3 motorway. The estate has an average lease length of approximately three years and a vacancy rate of less than 5 per cent. The transaction price of £70.0 million reflects a net initial yield of 5.9 per cent.
Mark Russell, Senior Fund Manager of LGIM Real Assets, said: “This off-market deal allows us to increase our exposure to south east industrials and to bolster our pipeline of asset management initiatives, complementing wider portfolio activities. The deal as structured also facilitates a net investment for our investors.”
Phil Redding, Chief Investment Officer of SEGRO, commented: “This is SEGRO’s ninth asset swap, enabling us to focus our portfolio on our core areas and asset types, in particular on big box warehouses in the Midlands and urban warehouses in London and the Thames Valley, whilst mitigating the impact of a disposal on income.”
DTRE acted for SEGRO and JLL acted for Legal & General.
Notes to editors
Legal & General Investment Management Real Assets (LGIMRA) is a division of Legal & General Investment Management (LGIM), one of Europe’s largest institutional asset managers and a major global investor. LGIM manages £1.28tn in assets (as at 31 December 2020), working with a range of global clients, including pension schemes, sovereign wealth funds, fund distributors and retail investors.
LGIM Real Assets has assets under management of £36.3bn (as at 31 December 2020) and is one of the largest private markets investment managers in the UK. Investing in both debt and equity and across the risk/return spectrum, LGIM Real Assets actively invests in and manages assets across commercial, operational and residential property sectors, as well as infrastructure, real estate, corporate and alternative debt.
Taking a long term view in order to future proof our investments, LGIM Real Assets continues to lead the industry in ESG performance, considering all environmental, social and governance issues at asset level as well as portfolio level. In 2021, we are implementing a strategy as part of our commitment to net zero carbon emissions across the real estate equity business by 2050, and have also committed to measuring social value across 20% of our platform by the end of the year.
(As of June 2021)
The value of an investment and any income taken from it is not guaranteed and can go down as well as up, you may not get back the amount you originally invested. Past performance is no guarantee of future results. You should consult an independent investment adviser prior to making any investment in order to determine its suitability to your circumstances.
Established in 1836, Legal & General is one of the UK's leading financial services groups and a major global investor, with over £1.4 trillion in total assets under management* of which a third is international. We also provide powerful asset origination capabilities. Together, these underpin our leading retirement and protection solutions: we are a leading international player in pension risk transfer, in UK and US life insurance, and in UK workplace pensions and retirement income. Through inclusive capitalism, we aim to build a better society by investing in long-term assets that benefit everyone.
*at 31 Dec 2021