The JV between SEGRO and Moorfield Real Estate Fund II (MREF II) has financed the deal with £65 million of equity investment each and a 5 year bank facility of up to £189 million with Metropolitan Life Insurance Company and DekaBank secured on the UKLF assets.
The investment produces a net income of around £18 million per annum and, at acquisition, the contracted rent is approximately £21 million per annum. This is a lowish yield, but many of the tenants are blue chips and the average lease has 13.3 years left. There are vacant units in Corby and Sheffield and a development site at Avonmouth to sweeten the deal. Current occupiers include Tesco, Sainsbury's, GKN Aerospace, Royal Mail, Booker and Exel UK.
Marc Gilbard, Chief Executive of Moorfield, said:
"Moorfield is the fund manager of opportunistic capital on behalf of blue chip investors and this acquisition will enable us to participate in an institutional grade real estate portfolio with a very experienced partner where opportunistic returns are possible. The UK market is materially undersupplied with good quality distribution property, yet this is currently one of the few sectors showing growth and rising demand. The UKLF portfolio offers us the opportunity to engage with high quality tenants, improve income profiles and enhance value by proactive asset management."
The tenanted units are located at:Bicester Distribution Park, Bicester
· Birmingham Mail Centre, Birmingham
· Bardon, Leicestershire
· DIRFT, Daventry
· Hatfield Business Park, Hatfield
· Rye Park Depot, Hoddesdon
· Snodland, Maidstone
· Keypoint Distribution Park, Swindon
· Tunnel Avenue, West Thurrock