SEGRO Expands European Logistics Portfolio with €470 Million Acquisition
Why we think this is good
The acquisition of this €470 million portfolio of fully-leased, modern logistics assets is a positive development for SEGRO. The transaction aligns with the company's strategy of expanding its presence in key European logistics hubs, and the strong financial metrics, including a 5.0% net initial yield, suggest the assets will contribute meaningfully to SEGRO's earnings. While there are some inherent risks in the real estate market, the successful completion of the deal and the portfolio's multi-year revenue visibility are encouraging signs.
Key Points
- SEGRO's SELP joint venture has completed the €470 million acquisition of a portfolio of six logistics assets in the Netherlands and Germany
- The portfolio totals 370,000 sq m of fully-leased, modern logistics space
- The assets generate approximately €24 million of headline rent, resulting in a 5.0% net initial yield and 5.4% net true equivalent yield
- The acquisition expands SEGRO's footprint in key European logistics hubs
Summary
SEGRO, through its SEGRO European Logistics Partnership (SELP) joint venture, has completed the acquisition of a portfolio of six assets from Titanium Ruth Holdco Limited (formerly Tritax EuroBox plc). The transaction values the portfolio at €470 million, including relevant property taxes and subject to customary adjustments. The portfolio totals 370,000 sq m of fully-leased, highly reversionary, modern logistics space located in established logistics hubs in the Netherlands and Germany. The assets currently generate approximately €24 million of headline rent, resulting in a blended net initial yield of 5.0% and a net true equivalent yield of 5.4%. This acquisition aligns with SEGRO's strategy of expanding its presence in key European logistics markets.