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.
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 £1.29 trillion1 ($1.57tn) in
assets, 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 billion2 ($43.8bn) 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
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.
1LGIM internal data as at 30 June 2022. These figures include assets managed by LGIMA, an SEC Registered Investment Advisor. Data includes derivative positions.
2Source: LGIM Real Assets. AUM data as at 30 June 2022.
*at 13 Jan 2023
For professional clients only. Past performance is not a guide to the future. 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. Views expressed are of LGIM as at 12 January 2023. The Information in this document (a) is for information purposes only and we are not soliciting any action based on it, and (b) is not a recommendation to buy or sell securities or pursue a particular investment strategy; and (c) is not investment, legal, regulatory or tax advice. Legal & General Investment Management Limited. Registered in England and Wales No. 02091894. Registered Office: One Coleman Street, London, EC2R 5AA. Authorised and regulated by the Financial Conduct Authority, No. 119272.
Established in 1836, Legal & General is one of the UK's leading financial services groups and a major global investor, with over £1.2 trillion in total assets under management* of which 39% is international. We have a unique and highly synergistic business model, which continues to drive strong returns. Legal & General provides powerful asset origination and management capabilities directly to clients, which also 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. Our purpose is to improve the lives of our customers and create value for our shareholders. Through inclusive capitalism, we are investing in long-term assets, such as real estate and infrastructure, that can help build a better society for the future.
*as at HY 2023