LONDON (ShareCast) - Segro has confirmed it has signed a 1bn euro Continental European warehouse joint venture with Canadian pension fund manager PSP Investments.

The Slough-based industrial property group will put €974m worth of its Continental European logistic portfolio into the new tie-up. The joint venture will buy the property using €390m of debt and €303m of equity from PSP Investments. The deal will net Segro £434m and help to reduce its £2.1bn of debt mountain.

The plan is to grow the portfolio to at least €2bn over the coming years. Both Segro and PSP Investments have agreed to inject another €62m to fund the development of the land bank.

Segro will act as the asset, property and development manager and will earn management fees.

David Sleath, Chief Executive of Segro said: “The transaction is the first step in building what we expect to be a strong long-term relationship with PSP Investments as we seek to take advantage of the growth and consolidation opportunities in the Continental European logistics market.

The deal is expected to complete towards the end of the third quarter.

Shares in Segro were up 1.895% at 279.6p at midday.

TB

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