SEGRO has launched a £573m rights issue as it bought a 50% stake in £1.1bn Airport Property Partnership from Aviva Investors, taking full ownership of the portfolio.
Some £216m of the proceeds will be used for the APP acquisition. As part of the deal, SEGRO will also give Aviva £149m in assets.
The company will also look to spend £165m of the rights proceeds on the development pipeline it established after its previous £325m placing in September. The final £175m will be used to fund other projects in the development of SEGRO’s landbank, including the options it holds with Roxhill.
APP includes 21 properties totalling 3.8m sq ft, 87% of which are at Heathrow Airport in London. SEGRO said the potential for development after the government’s support for a third runway at Heathrow was one of the main reasons for the deal.
SEGRO bought its stake in APP in June 2010 and acted as asset manager for its joint venture with Aviva.
David Sleath, chief executive of SEGRO, said: “The new capital we are seeking to raise will allow us to further progress the implementation of our development and income growth strategy, taking advantage of a very favourable occupier market backdrop.
“Our Heathrow portfolio is one of the jewels in our crown and by acquiring full ownership of the assets within APP we are able to add further scale in this supply-constrained market.”
The issue price was 345p per share – a discount of 28.9% to the closing price on 9 March.
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