SEGRO has bought back a portfolio of offices on Bath Road in Slough, Berkshire, from clients of AEW for £425m – a 4.6% yield.
The circa 960,000 sq ft portfolio is spread across 39 acres and provides an annual passing rent of £20m.
SEGRO previously developed the office portfolio and sold it in January 2016 as part of its strategy to dispose of non-core assets, with the proceeds reinvested into the group’s development pipeline.
The industrial REIT said the ageing nature and relatively short lease terms of some of the offices meant the acquisition would enhance its ability to satisfy growing customer demand for data centres, creative industries, life science occupiers and other potential users of industrial space in Slough.
SEGRO chief executive David Sleath 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 more than 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 reacquisition 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.
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