SEGRO ENTERS EXCLUSIVE PARTNERSHIP WITH ROXHILL
18 February 2016
SEGRO ENTERS EXCLUSIVE PARTNERSHIP WITH ROXHILL
Potential development of more than 10 million sq ft of big box logistics warehousing over 10 years in the South East and Midlands, adding significant scale to SEGRO's UK big box logistics portfolio
SEGRO plc ('SEGRO' or 'the Company') and Roxhill Development Group ('Roxhill') have created a partnership which will provide SEGRO with access to a portfolio of big box logistics warehouse development sites in the South East and Midlands.
Roxhill is a highly respected logistics developer that SEGRO knows well, having established a successful joint venture with it in 2013 at the Rugby Gateway site. Roxhill Management Rugby Limited ('RMRL') will act as development manager to the new partnership and will work exclusively with SEGRO once Roxhill has completed a number of existing development projects with other partners.
The sites subject to the transaction are at various stages of the planning process and the terms of the transaction allow SEGRO to phase its investment. An initial investment, the majority of which is deferred, will be payable in consideration for a 50 per cent share of Roxhill's interests in options over the sites. The deferred payment is due on each site as and when planning permission is granted, at which point SEGRO has the right to buy Roxhill's remaining interests in the sites. Under the terms of the agreement, SEGRO will fund planning fees and development management costs.
After a period of 30 months from completion, SEGRO has the right to acquire all of Roxhill's remaining option interests as well as the management platform, RMRL.
Should all of the sites become fully developed, the total potential capital expenditure (including land and infrastructure) is estimated to be around £800 million over a 10 year period which will deliver over 10 million sq ft of big box logistics warehousing. The developments should generate an estimated blended yield on cost of approximately 7 per cent at today's rental levels.
The terms of the transaction allow SEGRO significant flexibility over the timing of development and avoids the initial drag of holding non-income producing land on its balance sheet.
SEGRO's Chief Executive Officer, David Sleath, said:
"Roxhill is a market-leading developer and a partner we know, trust and for whom we have a high regard. This partnership establishes a clear path for us to achieve the scale we desire in the attractive UK big box logistics market. We are convinced that this market has very favourable long term prospects given the lack of quality supply and increasing demand from retailers and logistics operators for modern space in the right locations."
ENDS
For further information, please contact:
SEGRO plc
Harry Stokes (Head of Investor Relations and Research)
Tel: +44 (0) 20 7451 9124 / harry.stokes@segro.com
Lizzie Humphreys (External Communications Manager)
Tel: +44 (0) 20 7451 9129 / lizzie.humphreys@segro.com
FTI Consulting
Richard Sunderland / Claire Turvey
Tel: +44 (0) 20 3727 1000
About SEGRO:
SEGRO is a UK Real Estate Investment Trust (REIT), and a leading owner, asset manager and developer of modern warehousing and light industrial property. It owns or manages 5.7 million square metres of space in £6.4 billion of assets (at 30 June 2015, SEGRO's share of which totals £5.2 billion), serving 1,200 customers from a wide range of industry sectors. Its properties are located around major conurbations and at key transportation hubs across nine European countries, principally in the UK, France, Germany and Poland.
For further information see www.SEGRO.com/investors.
This information is provided by RNS
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