SEGXF Segro PLC REIT (PK)

TIDMSGRO 
 
RNS Number : 8366K 
SEGRO PLC 
27 April 2010 
 
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               SEGRO ACQUIRES 50% OF AIRPORT PROPERTY PARTNERSHIP 
 
SEGRO, Europe's leading provider of flexible business space, today announces it 
has exchanged conditional contracts for the acquisition of BAA's 50% interest in 
the Airport Property Partnership ("APP") for GBP111.3m cash. APP is a 50/50 
joint venture with Aviva Investors, focused on airport-related industrial assets 
in and around major UK airports. 
 
The APP portfolio includes 17 direct property assets and three indirect 
investments. The direct assets comprise an area of 3.5m square feet with a 
vacancy rate of 6.8% by ERV and an average unexpired lease length of 13.4 years. 
By value, 73% of the assets are located in the Heathrow market. 
 
The acquisition price implies a property valuation of GBP446.6m on a 100% 
ownership basis (excluding indirect investments), and a net equivalent yield of 
7.6%.  The implied net initial yield of the direct assets is 6.0% primarily due 
to a number of buildings being currently let on "peppercorn" rents which will 
revert to market rents over the years ahead; the net reversionary yield, 
reflecting these potential uplifts, is 8.3%. As at 31 March 2010,  APP had net 
debt of GBP229.0m. 
 
SEGRO will become the asset manager of the APP portfolio whilst Aviva Investors 
will retain its role as fund manager. 
 
In addition, SEGRO and Aviva Investors are in discussions to expand the joint 
venture significantly through the proposed purchase by APP of approximately 
GBP240m of complementary assets within SEGRO's existing portfolio. Details will 
be disclosed in due course. 
 
In aggregate the two transactions are expected to generate net cash proceeds of 
approximately GBP60m for SEGRO. 
 
Commenting on the transaction, Ian Coull, Chief Executive of SEGRO said: "The 
APP portfolio comprises high quality assets, reinforces SEGRO's position at 
Heathrow, one of our core locations in the UK and offers significant upside 
potential.  Further, the opportunity to expand the APP joint venture through the 
injection of existing SEGRO assets meets one of the Group's strategic objectives 
to leverage its property management skills across a broader asset base.  We look 
forward to working with Aviva Investors to add value to the portfolio in the 
years ahead." 
 
 
For further information please contact: 
 
+---------------------+-------------------------+---------------------+ 
| SEGRO               | +44 20 7399 4547        | David Sleath        | 
+---------------------+-------------------------+---------------------+ 
|                     |                         |                     | 
| Maitland            | +44 20 7379 5151        | Liz Morley          | 
|                     |                         |                     | 
+---------------------+-------------------------+---------------------+ 
 
 
 
Conference Call for Investors and Analysts 
There will be a conference call for investors and analysts at 9:30 AM today GMT 
to discuss this transaction and the Group's interim management statement for the 
period since 31 December 2009, also announced this morning. 
 
To participate in the call, please dial: 
UK: +44 (0)20 7138 0816 
US: +1 718 354 1171 
 Confirmation Code: 6840669# 
From midday the conference call will be available on a replay basis from the 
investor relations page of SEGRO.com. 
 
 
 
About SEGRO 
SEGRO is Europe's leading provider of flexible business space, operating from a 
network of offices across 10 countries. The Group is a Real Estate Investment 
Trust  (REIT), listed on the London Stock Exchange and Euronext Paris.  SEGRO's 
portfolio comprises GBP5.3 billion of predominantly industrial and warehouse 
assets concentrated in and around major business centres and transportation hubs 
such as ports, airports and motorways intersections.  The Group serves over 
1,900 customers spread across many geographic and different industry sectors. 
It has 5.9 million sq m of built space and a passing rent roll of GBP344 million 
as at 31 December 2009.  For more information: www.SEGRO.com 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
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