UK Commercial Property Trust and Segro complete multi-million pound land swap

LONDON (ShareCast) - (ShareCast News) - UK Commercial Property Trust (UKCPT) and SEGRO announced on Monday the completion of a multi-million pound asset swap deal. UKCPT, advised by Standard Life will acquire Ventura Park in Hertfordshire for £67.1m while SEGRO receives the Asda Distribution Centre in Northampton for £31.0m and £36.1m in cash.

Standard Life Investments fund manager Will Fulton said it's a clear indication of the strong progress the trust continues to make in repositioning its portfolio.

"The acquisition of Ventura Park also ties in with our wider strategy to reduce our exposure to low-growth retail and invest in stock providing a sustainable income with rental growth potential.

"Through utilising our strong market relationships, we have acquired this core asset off-market as part of a swap deal which is beneficial to both ourselves and SEGRO." SEGRO's chief investment officer said the deal is in line with their strategy grow its logistics portfolio by acquiring a modern, well-specified distribution unit in a prime Midlands location on a long lease to a strong single occupier.

Ventura Park is a 35 acre, multi-let industrial estate with 589,302 sq ft of lettable space. Located at Radlett, just off the M25 between its junctions with the M1 and A1(M), it provides strong connectivity to both London and the wider UK.

The estate produces rental income of £4.2m per annum from 13 industrial units which are fully let to tenants with strong covenants including DHL, Kelly's self-storage B&Q, EE and Warner Brothers Studios, providing a net initial yield of 6.0 per cent.

The distribution centre is on the Brackmills Industrial Estate which is situated in a prime distribution location in the Midlands, approximately three miles from the M1 motorway.

The building is a high specification, cross-docked distribution warehouse, built in 1997 and extensively refurbished in 2007.

The warehouse is leased to Asda Stores until 2028 with a tenant option to extend the lease for a further five years and is used for the distribution of the George clothing range.

The net initial yield on acquisition is 4.7% and the rental income of the asset is currently reversionary.