SEGRO buys Slough office portfolio

Segro

SEGRO plc has acquired a portfolio of offices on the Bath Road, Slough, from clients of AEW for £425 million.

The portfolio represents 89,000 sq m of built space spread across 39 acres of land with a passing rent of £20 million, reflecting a net initial yield of 4.6 per cent.

UK Real Estate Investment Trust, SEGRO previously developed the office portfolio and sold it as part of its strategy to dispose of non-core assets, with the proceeds reinvested into the Group’s highly profitable development pipeline. Since January 2016, when the office portfolio was sold, the Slough Trading Estate has delivered capital value growth of 59 per cent and was valued at £2.2 billion as of June 2021.

The ageing nature and relatively short lease terms of some of the offices means that this acquisition will enhance SEGRO’s ability to satisfy growing customer demand for data centres, creative industries, life science occupiers and other potential users of industrial space in Slough.

David Sleath, SEGRO’s Chief Executive, said: “Over recent years we have seen a transformation in the nature and level of occupier demand for industrial, data centre and other uses of space in Slough. Since 2016, we have created over 96,000 sq m of new industrial space on the Slough Trading Estate to meet this demand, of which 58,000 sq m has been provided to support our growing data centre customers.

“Developing the highest and best use of industrial land in Slough has been core to our purpose as a business since 1920 and we look forward to continuing to do so following the re-acquisition of the office portfolio, allowing SEGRO to further invest and attract new businesses into the local area.”

The acquisition will be funded from cash and bank facilities.